Ambac Industries, Inc. v. Commissioner
United States Tax Court
P and S joined in filing consolidated income tax returns for 1964 and 1965. S sustained net operating losses in 1964 and 1965, and these losses were used to offset the separate taxable income of P in each of the 2 years.
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P and S joined in filing consolidated income tax returns for 1964 and 1965. S sustained net operating losses in 1964 and 1965, and these losses were used to offset the separate taxable income of P in each of the 2 years. S dissolved in 1965 after making liquidating distributions to P. Held, for the purpose of computing P's loss on the worthlessness of the stock and debt of S, P's basis in such stock and debt must be reduced by the sum of S's net operating losses in 1964 and 1965. Sec. 1.1502-34A(b)(2)(i), Income Tax Regs.Henry C. Beck Builders, Inc., 41 T.C. 616, 629-633 (1964), distinguished.
1Opinion of the Court
OPINION
Tannenwald, Judge:
Respondent determined a deficiency of $140,676.28 in petitioner’s income tax for 1965. Petitioner has conceded all but one of the issues raised in the statutory notice of deficiency.
The disputed issue relates to the computation of petitioner’s basis in the stock and debt of its former subsidiary and will require an interpretation of the pre-1966 consolidated return regulations.1 The specific question to be decided is whether, in computing a parent corporation’s loss on the worthlessness of the stock and debt of its subsidiary, the parent must reduce its basis in such…
2Cases cited13 opinions
- United States v. Skelly Oil Co.Supreme Court of the United States · 1969
- Charles Ilfeld Co. v. HernandezSupreme Court of the United States · 1934
- Henry C. Beck Builders, Inc. v. CommissionerUnited States Tax Court · 1964
- McLaughlin v. Pacific Lumber Co.Supreme Court of the United States · 1934
- Bush Terminal Bldgs. Co. v. CommissionerUnited States Tax Court · 1946
8 more not listed; retrieve them via the Exa API.
3Cited by7 opinions
- Ambac Industries, Inc. (Formerly American Bosch Arma Corporation) v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1973
- Alling v. CommissionerUnited States Tax Court · 1994
- Estate of Reeves v. CommissionerUnited States Tax Court · 1993
- Alling v. CommissionerUnited States Tax Court · 1994
- Ambac Industries, Inc. v. CommissionerUnited States Tax Court · 1973
2 more not listed; retrieve them via the Exa API.