Covil Insulation Co. v. Commissioner
United States Tax Court
Petitioner filed consolidated returns with its subsidiary, Imesco, for 1967 and 1968. Imesco sustained large net operating losses in each year which either reduced consolidated income or were carried back to prior taxable years in amounts exceeding petitioner's basis in its Imesco stock.
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Petitioner filed consolidated returns with its subsidiary, Imesco, for 1967 and 1968. Imesco sustained large net operating losses in each year which either reduced consolidated income or were carried back to prior taxable years in amounts exceeding petitioner's basis in its Imesco stock. Held, sec. 1.1502-32(e), Income Tax Regs., which requires a parent corporation filing consolidated returns to reduce its basis in the stock of its subsidiary below zero for losses of the subsidiary in excess of the parent's basis in the stock (thus creating an excess loss account), is valid. Held, further,…
1Opinion of the Court
OPINION
Section 15014 permits an affiliated group of corporations to file a consolidated income tax return, in lieu of separate returns, for each taxable year. In granting this privilege, Congress did not attempt to prescribe detailed rules governing the determination of the income tax liability of members of the affiliated group. Rather, section 15025 authorizes the Secretary or his delegate to prescribe such regulations as he may deem necessary in order to clearly reflect the affiliated group’s income tax liability.
Under the prescribed regulations, the current earnings or losses of each…
2Cases cited14 opinions
- Commissioner v. South Texas Lumber Co.Supreme Court of the United States · 1948
- United States v. CorrellSupreme Court of the United States · 1967
- Charles Ilfeld Co. v. HernandezSupreme Court of the United States · 1934
- Georgia-Pacific Corp. v. CommissionerUnited States Tax Court · 1975
- Joseph Weidenhoff, Inc. v. CommissionerUnited States Tax Court · 1959
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3Cited by17 opinions
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- Wyman-Gordon Co. v. CommissionerUnited States Tax Court · 1987
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