Insilco Corp. v. Commissioner
United States Tax Court
Three subsidiaries of petitioner accounted for certain of their inventories on the last-in, first-out (LIFO) method and reported to petitioner on that basis. Petitioner converted the inventories of the subsidiaries to the moving-average method for purposes of its annual report to its shareholders.
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Three subsidiaries of petitioner accounted for certain of their inventories on the last-in, first-out (LIFO) method and reported to petitioner on that basis. Petitioner converted the inventories of the subsidiaries to the moving-average method for purposes of its annual report to its shareholders. Held, such annual report did not violate the conformity provision of sec. 472(e), I.R.C. 1954, so as to deprive the affiliated group (of which petitioner and the three subsidiaries were members) of the right to use LIFO for the inventories of those subsidiaries on a consolidated tax return.
1Opinion of the Court
OPINION
Tannenwald, Judge:
Respondent determined a deficiency in Federal income tax of petitioner for 1971 of $3,378,664. The issue remaining for resolution is whether members of the affiliated group, of which petitioner is the parent, are precluded from using for income tax purposes the last-in, first-out (LIFO) method of valuing inventories at December 31, 1971, when petitioner converted its inventories to the moving-average method for purposes of its annual report to its shareholders.
All of the facts in this case have been stipulated and are found accordingly. The stipulation of facts and…
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