Remco S. S. Co. v. Commissioner

The petitioners herein seek review of an order determining their income tax liability for’the years 1927 and 1928.

Petitioner Caspar Lumber Company, a California corporation, hereinafter called “Caspar,” during the years 1926, 1927, and 1928, owned all the outstanding stock of petitioner Remco Steamship Company, also a California corporation, hereinafter called “Remco,” and during said years owned slightly less than 95 per cent, of the outstanding common stock of Redwood Manufacturers Company, a Nevada corporation, hereinafter called “Redwood.”

Caspar owned a tract of redwood timberland, and operated a sawmill for the purpose of converting the timber into lumber, shingles, and railroad ties. It sold all of these products, except for small quantities, to Redwood, and shipped the same to Redwood by boats belonging to Remco.

The net income or losses of the three corporations, before making any deductions for statutory net losses that might be carried forward from the previous year or years, are shown as follows:

1926 1927 1928

Caspar Lumber Company... $101,516.83 * $14,615.46 $124,897.

Remco Steamship Company. 13,507.99 23,127.03 27,578.

Redwood Manufacturers Co. 52,163.53…