Mutual Iron Works, Inc. v. Commissioner

MUTUAL IRON WORKS, INC., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
Mutual Iron Works, Inc. v. Commissioner
Docket No. 9091.
United States Board of Tax Appeals
6 B.T.A. 894; 1927 BTA LEXIS 3374;
April 19, 1927, Promulgated

*3374 In the absence of evidence showing whether a predecessor partnership earned any income, or whether the return filed by the successor corporation constituted a valid election under section 330, Revenue Act of 1918, it can not be determined that partnership income was erroneously included by the Commissioner.

Oscar Ferger, C.P.A., for the petitioner.
T. M. Wilkins, Esq., for the respondent.

MILLIKEN

*894 This proceeding results from the determination of a deficiency in income and profits taxes for the year 1918, in the amount of $579.44. Error is alleged in that the respondent included in the income of the petitioner the income of a predecessor partnership.

FINDINGS OF FACT.

Petitioner is a corporation organized on February 25, 1918, under the laws of the State of New Jersey, and having its principal office at 907 Communipaw Avenue, Jersey City, N.J. It was the successor of a predecessor partnership, which was in existence from January 1, 1918, to February 25, 1918. The partners of the predecessor partnership, who were also the stockholders in the successor corporation, originally filed individual tax returns reporting the income from*3375 the partnership and the income of the corporation. In March, 1925, the respondent requested petitioner to file a corporation return of income, which was done, and which return purports to cover the period January 1, 1918, to December 31, 1918, or the period during which the partnership existed, as well as the period from February 25, 1918, to December 31, 1918, during which time the corporation existed.

OPINION.

MILLIKEN: Petitioner assigns error in that the return filed by it in March, 1925, included the income of the predecessor partnership, *895 which income should have been excluded from the return as filed by the petitioner. No evidence was introduced and our findings of fact result from admissions made at the hearing of this cause by counsel for the respondent. We are unable to determine if petitioner made a valid election pursuant to the provisions of section 330 of the Revenue Act of 1918, so that the income of the predecessor partnership, from January 1, 1918, to date of organization of petitioner on February 25, 1918, should be included as the income of the successor corporation, or if the necessary conditions precedent to the applicability to section 330, *3376 have been met. We also have no evidence before us that the partnership derived or earned any net income for the period January 1, 1918, to February 25, 1918. It is accordingly impossible to determine whether the return filed by petitioner in March, 1925, actually included any income earned by the predecessor partnership.

Judgment will be entered for the respondent.