Pine Ridge Coal Co. v. Commissioner
United States Board of Tax Appeals
1. The petitioner having filed separate returns for 1922 and 1923, is not entitled to have its tax computed for those years on a consolidated basis. 2. Advances to, and investment in capital stock of a corporation, held on the evidence to have been made by the petitioner, and since the corporation became bankrupt in 1922 without sufficient assets to pay unsecured creditors, of which petitioner was one, the amounts so advanced and invested were proper deductions from income…
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1. The petitioner having filed separate returns for 1922 and 1923, is not entitled to have its tax computed for those years on a consolidated basis. 2. Advances to, and investment in capital stock of a corporation, held on the evidence to have been made by the petitioner, and since the corporation became bankrupt in 1922 without sufficient assets to pay unsecured creditors, of which petitioner was one, the amounts so advanced and invested were proper deductions from income for the taxable year and the Commissioner erred in disallowing them.
1Opinion of the Court
*491OPINION.
Matthews :
We are of the opinion that the petitioner, although it owned the entire outstanding capital stock of the Hinchman Creek Coal Company, elected to file separate returns for 1922 and 1923 and therefore is not entitled to have its taxes for these years computed on the basis of a consolidated return.
Section 240 (a) of the Revenue Act of 1921 reads:
That corporations which are affiliated within the meaning of this section may, for any taxable year beginning on or after January 1, 1922, make separate returns or, under regulations prescribed by the Commissioner with the approval of…
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