The Doric Company, Transferee of Kellerblock Corporation, Dissolved v. Commissioner of Internal Revenue

Petitioner, The Doric Company, is a corporation organized under the laws of the State of Washington. It is a transferee of the assets of the Kellerblock Corporation, and is liable for any deficiencies in income tax, plus interest thereon, which may be determined to be due with respect to Kellerblock.

During the taxable year Kellerblock owned the Grosvenor House Apartments in Seattle, Washington, and kept its books of account and prepared its income tax returns on the accrual method of accounting with a fiscal year ended October 31st of each year.

Doric acquired the outstanding shares of Kellerblock at various times in 1957 and ’58, and took over the full control of Kellerblock in the early part of 1958, including the management of its properties and direction of its affairs.

Kellerblock filed its separate income tax returns for the fiscal years ending October 31, 1955, 1956 and 1957, and for the short period November 1, 1957 ending January 31, 1958. Thereafter the income and expenses of Kellerblock were included in the consolidated returns of Doric, its parent company, and subsidiaries, until Kellerblock was dissolved.

The propriety and necessity of making the short period…