American Pac. Whaling Co. v. Commissioner

This matter has been before this court on a previous petition by the taxpayer to review a decision of the Board of Tax Ap *47 peals. We refer to our opinion on that application for a statement of the facts. 9 Cir., 74 F.2d 613 . The decision of the Board imposing the tax was reversed and the matter remanded to the Board for a determination by it of the nature of the arrangement made between the Washington Company and petitioner under which, during the fishing season of 1926, it used and operated the property formerly belonging to the Washington Company.

On the hearing on remand the Board of Tax Appeals found that before the whaling season of 1926 opened, the whaling ships of the Washington Company were transferred to petitioner, for a consideration and were owned by it. It follows from our previous decision that the income derived from the use of the transferred property was the income of the petitioner for the year 1926 and not that of the Washington Company. Consequently, the petitioner is not entitled to deduct from its income for the year 1926 the loss suffered by the Washington Company in 1925. § 206 (b), Revenue Act of 1926, 44 Stat. 9 , 17, Id., 26 U.S.C.A. § 117 note.

In…