Hawley Inv. Co. v. Commissioner

23 B.T.A. 953, 1931 BTA LEXIS 1789

• Court: United States Board of Tax Appeals
• Decided: June 30, 1931
• Docket: Docket Nos. 45169, 45170.
• Status: Published

Opinion

OPINION.

McMahon :

The sole question here presented is whether, in computing the consolidated income of the three petitioners for the year 1927, there should be reflected the net loss of $25,216.40 sustained by the Butler-Yeitch Company for the year 1926, in which year that company was not afliliated with the other two petitioners. The Butler-Yeitch Company also had a not loss for the year 1927, without considering the net loss for 1926.

Section 206 (b) of the Revenue Act of 1926 provides:

If, for any taxable year, il: appears upon the production of evidence satisfactory to the Commissioner that any taxpayer has sustained a net loss, the amount thereof shall be allowed as a deduction in computing the net income of the taxpayer for the succeeding taxable year (hereinafter in this section called “ second year ”), and if such net loss is in excess of such net income (computed without such deduction), the amount of such excess shall be allowed as a deduction in computing the net income for the next succeeding taxable year (hereinafter in this section called “ third year ”) ; the deduction in all cases to be made under regulations prescribed by the Commissioner with the approval of the Secretary.

In Ben Ginsburg Co., 19 B. T. A. 81, the same question was presented. Adhering to our decision in that proceeding, we hold that the net loss of the Butler-Yeitch Company for the year 1926 should be used to reduce the consolidated net income of the three petitioners for the year 1927.

Judgment will be entered wider Bule 50.