Marbelite Corp. of America v. Commissioner

The petitioner 'made a tax return for 1929 and 1930 upon the theory that it was affiliated with a subsidiary corporation known as the Marbelite Corporation of. Illinois. The latter corporation had been organized .by the petitioner with a capital stock of 4,000 shares of the par value of $100 each. Of this stock' 2,995 shares had been issued to petitioner and five shares owned by petitioner were issued to directors as qualifying shares. On March 16, 1928, petitioner transferred 1,000 shares of its 2,995 shares to Bassler, Bippus, and Rose. The Commissioner held that the corporations were not affiliated corporations authorized to make consolidated returns because of the transfer of 1,000 shares of stock (Revenue Act 1928, c. 852, 45 Stat. 791 , § 141 [26 USCA § 2141]). The petitioner appealed to the Board of Tax Appeals from the determination by the Commissioner. It alleged that “on March 16, 1928, petitioner transferred 1,000 shares of said 2995 shares of stock to the firm of Bassler, Bippus and Rose, pursuant to the terms of two agreements entered into on said date.” After setting forth the terms of the agreements, it further alleged that “the petitioner contends that the…