Commissioner v. National Casket Co.

THOMPSON, Circuit Judge.

This is a petition for review of a decision of the Board of Tax Appeals. In 1924, the respondent acquired all of the capital stock of Hornthal & Co., a subsidiary. In 1925, the subsidiary operated at a gain, but in 1926, 1927, and 1928, it sustained operating losses. Throughout the period of affiliation, the respondent filed consolidated income tax returns. In 1928, the respondent dissolved the subsidiary and took over its assets, applying part to repay itself for advances made to the subsidiary and the balance toward its investment in the capital stock of that…