Belvidere Lumber Co. v. Commissioner , 6 B.T.A. 84 ( 1927 )

BELVIDERE LUMBER CO., INC., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Belvidere Lumber Co. v. Commissioner

Docket No. 12045.

United States Board of Tax Appeals

6 B.T.A. 84; 1927 BTA LEXIS 3607;

February 7, 1927, Promulgated

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">*3607 A corporation filing a separate return for 1922 may not subsequently file a consolidated return for that year.

R. S. Page for the petitioner.

A. George Bouchard, Esq., for the respondent.

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MILLIKEN

">*85 This is a proceeding for the redetermination by the respondent of a deficiency in income tax for the calendar year 1922 in the amount of $954.69. The sole issue presented is whether the petitioner, having filed a separate return for the year 1922, may subsequently file a consolidated return pursuant to the provisions of section 240 of the Revenue Act of 1921.

FINDINGS OF FACT.

Petitioner, a Vermont corporation, with its principal office at Hyde Park, was organized in 1919 for the purpose of taking over from the Lamoille County Savings Bank & Trust Co. certain real property previously acquired by the latter through foreclosure proceedings.

In 1922 the petitioner was in need of additional funds to carry on its business, which could not be furnished under the laws of Vermont by the Lamoille County Savings Bank & Trust Co. To meet this situation, the Lamoille Realty Co. was organized in October, 1922, to which company petitioner's real">*3608 property and plant were transferred.

After the organization of the Lamoille Realty Co. and during the remainder of the year 1922, its capital stock and that of the petitioner was held as follows:

Petitioner		Lamoille Realty Co.
Name	Number of	Name	Number of
	shares		shares
Alice Page	98	Alice Page	98
Hallie G. Page	1	Hallie G. Page	1
Mary Fisk Scribner	1	Mary Fisk Scribner	1
Total	100	Total	100

For the taxable year 1922, petitioner filed a return for Federal income-tax purposes, as a separate company, in which it reported a profit of $14,430.30 from the sale of its properties to the Lamoille Realty Co. The respondent has held that the gain derived from the sale was $37,563.11.

OPINION.

MILLIKEN: Section 240(a) of the Revenue Act of 1921, provides that corporations which are affiliated within the meaning of that section may, for any taxable year beginning on or after January 1, 1922, make a separate return, or, under regulations prescribed by the Commissioner, make a consolidated return. The statute, thus, ">*86 in the case of affiliated corporations, provides two ways in which returns may be filed. Either return">*3609 is a correct and proper return, but the return that is filed is the only return recognized by the law and upon which the taxes due thereunder shall be computed and determined.

We decided, in , that a separate return could not be subsequently filed, where a joint return had been filed pursuant to the provisions of section 223 of the Revenue Act of 1921. The decision in , is decisive and controlling in the instant proceeding.

Decision redetermining the deficiency for 1922 to be $954.69 will be entered.