United States Supreme Court Cases & Opinions

U.S. Supreme Court

Atlantic City Electric Co. v. Commissioner, 288 U.S. 152 (1933)

Atlantic City Electric Co. v. Commissioner of Internal Revenue

No. 163

Argued December 13, 1932

Decided February 6, 1933

288 U.S. 152

Syllabus

1. Where one corporation has legally enforceable control of substantially all of the stock of another, the two are "affiliated," and must make a consolidated return under § 1331, Revenue Act of 1921, and § 24D, Revenue Act of 1918. P. 288 U. S. 153.

2. In determining whether the control is of substantially all of the stock, there is no ground for excluding preferred stock outstanding with voting rights, even though it be redeemable at any time and have a limited interest in dividends. P. 288 U. S. 154.

3. Ownership by the one corporation of all the common stock and none of the preferred stock of the other, giving control of only 77% of all stock outstanding, held insufficient for affiliation. P. 288 U. S. 156.

57 F.2d 186 affirmed.

Certiorari, 287 U.S. 582, to review a judgment reversing the Board of Tax Appeals, 15 B.T.A. 1084, and sustaining a ruling of the Commissioner of Internal Revenue.