Albert Leon & Son, Inc. v. Commissioner
United States Board of Tax Appeals
1. Two affiliated corporations filed separate returns for 1927 and the affiliation was terminated in that year; a new group of seven corporations was formed in 1928, which included the two corporations formerly affiliated. Held, the new group has an election and may make a consolidated return under section 142(a) of the Revenue Act of 1928. 2. Net losses sustained prior to affiliation may not be deducted from the consolidated net income in 1928.
1Opinion of the Court
*254OPINION.
GoodRicpi:
It is agreed that during 1926 and 1927 all the stock of Albert Leon & Son, Inc., Perth Amboy, and Albert Leon & Son, Plainfield, New Jersey, was owned by the same interests. Therefore, these two corporations were affiliated within the meaning of section 240 of the Eevenue Act of 1926, but they elected to file separate returns for 1926 and 1927. They were included in the new affiliated group formed in 1928. Eesponclent maintains that they had no election to file a consolidated return for 1928, under section 142 of the Eevenue Act of 1928, and could not do so without first…
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