BUSA427_Chapter6 - Chapter 6 Ch 6 Question 59 a New Colonial Ice Co 4 USTC 1292 292 U.S 435 1 The issue in this case was Could a new corporation

BUSA427_Chapter6 - Chapter 6 Ch 6 Question 59 a New...

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Chapter 6 Ch. 6: Question 59a. New Colonial Ice Co. 4 USTC ¶1292, 292 U.S. 435:1) The issue in this case was: Could a new corporation taking over an older corporation have its taxable income for the succeeding period computed and determined by deducting from its net income for that period the net losses sustained by the older corporation in the preceding period? The cases used to determine their rights were: Pioneer Pole & Shaft Company v. Commissioner, 55 2) The Supreme Court decided that for New Colonial Ice Co: every deduction from gross income is a matter of legislative grace, any particular deduction is allowable only if there is a clear provision therefor and, hence, a taxpayer seeking a deduction must be able to point to an applicable statute and show that the taxpayer comes within its terms. The law used was: §204(b) of the Revenue Act of 1921, c. 136, 42 Stat. 227, 231.b. Welch v. Helvering, 3 USTC ¶ 1164, 290 U.S. 111:

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