Standard Lumber Co., Formerly Pilot Rock Lumber Co. v. Commissioner of Internal Revenue

The basic question presented for review on this appeal is whether petitioner is entitled to file a consolidated income tax return with Oregon Fibre Products, Inc., an Oregon corporation, for the taxable year 1954 under Sections 1501 and 1504(a) (2) of the Internal Revenue Code of 1954. The Tax Court decided that petitioner was not entitled to do so and ordered a deficiency in income tax due from petitioner for the taxable year 1954 in the amount of $208,092.16. The opinion of the Tax Court is reported at 35 T.C. 192 .

There is no dispute concerning the facts which were stipulated. The facts pertinent to this review may be summarized as follows: The petitioner is a dissolved and liquidated corporation which, prior to its dissolution, was incorporated under the laws of the State of Oregon. Oregon Fibre Products, Inc., hereinafter referred to as “Products”, is an Oregon corporation. Both corporations maintained their books on an accrual basis of accounting by calendar years and filed a consolidated income tax return for the taxable year 1954.

Products had two classes of authorized stock, preferred and common. The preferred stock did not possess voting rights and was limited and…