APPEAL OF AMERICAN LA DENTELLE, INC., Docket No. 611.

• Decision Date: 10 February 1925
• Docket Number: Docket No. 611.
• Citation: 1 BTA 575
• Parties: Appeal of AMERICAN LA DENTELLE, INC., and MANORIAL DEVELOPMENT CORPORATION.
• Court: U.S. Board of Tax Appeals

1 B.T.A. 575 (1925)

Appeal of AMERICAN LA DENTELLE, INC., and MANORIAL DEVELOPMENT CORPORATION.

Docket No. 611.

Board of Tax Appeals.

Submitted January 12, 1925.

Decided February 10, 1925.

Paul L. Loewenwarter, C. P. A., for the taxpayer.

Arthur H. Fast, Esq. (Nelson T. Hartson, Solicitor of Internal Revenue) for the Commissioner.

Before JAMES, STERNHAGEN, TRAMMELL, and TRUSSELL.

The parties have agreed upon the facts, but disagree as to the period for which a consolidated return should be filed.

FINDINGS OF FACT.

American La Dentelle, Inc., hereinafter called the American Company, is a New York corporation, incorporated April 28, 1914. Manorial Development Corporation, hereinafter called the Manorial Company, is a New York corporation, incorporated June 8, 1917.

From some time in 1918 to July 1, 1919, the American Company was controlled as follows:

                Otto J. Ahlstrom __________________________________________ 187½
                C. J. Ahlstrom ____________________________________________ 186½
                C. H. Ahlstrom ____________________________________________   1
                Alien Property Custodian __________________________________ 125
                                                                           _____
                      Total capital stock of $50,000 ______________________ 500
                

The Manorial Company was at all times owned in equal shares by Otto J. and C. J. Ahlstrom. On July 1, 1919, Otto J. and C. J. Ahlstrom acquired, in equal shares, the 125 shares of American Company stock from the Alien Property Custodian, and thereafter they owned both corporations in equal shares. It is agreed that there was no affiliation of the corporations from January 1 to June 30, 1919.

The Commissioner determined a deficiency of $2,360.30 income and profits tax to be due from the American Company for the calendar year 1919. It is stipulated that the entire deficiency depends upon the decision as to the period of affiliation.

DECISION.

The deficiency determined by the Commissioner is disallowed.

OPINION.

STERNHAGEN:

The appeal presents a question under section 240 of the Revenue Act of 1918, to which there must be many similar, in which the taxpayers were affiliated because the same persons held the stock of both corporations for part of the taxable year. But we have only an agreed statement of the facts in this appeal and no brief of either party as to the principles which are applicable.

At the beginning of the calendar year 1919 there were two separate and distinct corporations, the Ahlstroms owning all the stock...