Garber Indus. Holding Co. v. Comm'r
United States Tax Court
P, a closely held corporation, is the parent of an affiliated group that files consolidated Federal income tax returns. In April 1998, A sold all of his P shares to his brother, B. As a result of that sale, B's percentage ownership of P increased by more than 50 percentage points. On its consolidated income tax return for 1998, P claimed a net operating loss (NOL) deduction of $ 808,935 for regular tax purposes and $ 735,783 for alternative minimum tax (AMT) purposes.
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P, a closely held corporation, is the parent of an affiliated group that files consolidated Federal income tax returns. In April 1998, A sold all of his P shares to his brother, B. As a result of that sale, B's percentage ownership of P increased by more than 50 percentage points. On its consolidated income tax return for 1998, P claimed a net operating loss (NOL) deduction of $ 808,935 for regular tax purposes and $ 735,783 for alternative minimum tax (AMT) purposes. R determined that the 1998 transaction between A and B resulted in an ownership change with respect to P within the meaning of…
1Opinion of the Court
Hat/pern, Judge:
By notice of deficiency dated June 21, 2001, respondent determined deficiencies in petitioner’s Federal income taxes for petitioner’s 1997 and 1998 taxable (calendar) years in the amounts of $4,916 and $301,835, respectively. The parties have settled all issues save one, leaving for our decision only the question of whether a 1998 stock sale between siblings that increased one sibling’s percentage ownership of petitioner by more than 50 percentage points resulted in an ownership change for purposes of section 382, triggering that section’s limitation on net operating loss…
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