Leland Stave Co. v. Commissioner

LELAND STAVE CO., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. Leland Stave Co. v. Commissioner Docket No. 9353. United States Board of Tax Appeals 6 B.T.A. 882; 1927 BTA LEXIS 3380; April 18, 1927, Promulgated *3380 A net loss sustained during a fractional part of a year, due to a change of accounting period, may not be deducted from the net income of other years under section 204(b), Revenue Act of 1918. O. R. Ewing, C.P.A., for the petitioner. J. A. Adams, Esq., for the respondent. MILLIKEN *882 This proceeding results from the determination of a deficiency in income and profits taxes for the calendar year 1920, in the amount of $2,135.10. Petitioner alleges that the Commissioner erred in refusing to allow a net loss sustained by it during the 9-month period ending December 31, 1919, and that the net loss was a deduction in computing the net income for the calendar year 1920, and relies upon the provisions of section 204(b) of the Revenue Act of 1918. *883 FINDINGS OF FACT. Petitioner is a Mississippi corporation, incorporated in March, 1918, with principal office at Leland. Prior to March 31, 1919, the books of petitioner were kept and tax returns were made upon the basis of the fiscal year ending March 31. Prior to the close of the fiscal year ended March 31, 1919, the corporation had operated under the name of the Miller Stave Co.*3381 , but at the end of the fiscal year March 31, 1919, changed the name of the corporation to the Leland Stave Co. At the close of the fiscal year March 31, 1919, petitioner requested permission of the respondent to change its basis of reporting income from a fiscal year basis to a calendar year basis. Respondent granted the request and petitioner accordingly filed a return of its income for the period March 31, 1919, to December 31, 1919, and a return for the calendar year 1920. For the nine months ending December 31, 1919, petitioner sustained a net loss of $8,219.69. OPINION. MILLIKEN: In the , we held that a corporation changing its accounting period from a fiscal year to a calendar year in 1919, is not entitled to the benefits of section 204(b) of the Revenue Act of 1918, and that decision is controlling in the case at bar. Judgment will be entered for the respondent.