Rocco, Inc. v. Commissioner
United States Tax Court
Rocco, Inc., the parent corporation, operated primarily as a poultry feed mill and contract grower of poultry, principally broilers. In 1971, for business reasons, Rocco, Inc., decided to go into the broiler processing business. Rocco, Inc., and Marval, a turkey processor and customer of Rocco, Inc., formed Rocco Farm Foods, Inc., to operate the broiler processing business, Rocco, Inc., acquiring 80 percent of the stock and Marval 20 percent of the stock of Farm Foods.
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Rocco, Inc., the parent corporation, operated primarily as a poultry feed mill and contract grower of poultry, principally broilers. In 1971, for business reasons, Rocco, Inc., decided to go into the broiler processing business. Rocco, Inc., and Marval, a turkey processor and customer of Rocco, Inc., formed Rocco Farm Foods, Inc., to operate the broiler processing business, Rocco, Inc., acquiring 80 percent of the stock and Marval 20 percent of the stock of Farm Foods. Rocco Broiler Farms was then formed as a wholly owned subsidiary of Farm Foods, to raise the broilers which were sold to Farm…
1Opinion of the Court
Drennen, Judge:
In these consolidated cases respondent determined deficiencies in petitioners' income tax as follows:
Docket No. Petitioner Year Deficiency
4328-75 Rocco, Inc . 1970 $13,631.90
4329-75 Rocco Turkeys, Inc . 1968 61,207.60
1969 162,833.18
1970 138,510.42
4330-75 Rocco, Inc., et al . 1972 171,317.00
Concessions were made by both parties, leaving for our consideration only one issue. In 1971, petitioners Rocco, Inc., and Rocco Turkeys, Inc., both of which were on the accrual method of accounting, each formed a controlled corporate subsidiary to conduct certain phases of their integrated…
2Cases cited20 opinions
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