Industrial Rayon Corp. v. Commissioner of Internal Revenues

MOORMAN, Circuit Judge.

The petitioner was the owner of the Fibre Throwing & Dyeing Company, which was engaged independently of the petitioner in the business of manufacturing and dyeing. For a time the subsidiary prospered, but running into hard times in 1925 it rapidly declined until in December of 1926, when it was compelled to cease its manufacturing and selling business. During the preceding year its board of directors had made repeated efforts to dispose of the properties of the company but had failed. In January of 1927 the company was heavily in debt to the Industrial Fibre Company,…