124 T.C. No. 1
UNITED STATES TAX COURT
GARBER INDUSTRIES HOLDING CO., INC., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 10871-01. Filed January 25, 2005.
P, a closely held corporation, is the parent of an
affiliated group that files consolidated Federal income
tax returns. In April 1998, A sold all of his P shares
to his brother, B. As a result of that sale, B’s
percentage ownership of P increased by more than 50
percentage points.
On its consolidated income tax return for 1998, P
claimed a net operating loss (NOL) deduction of
$808,935 for regular tax purposes and $735,783 for
alternative minimum tax (AMT) purposes. R determined
that the 1998 transaction between A and B resulted in
an ownership change with respect to P within the
meaning of sec. 382(g), I.R.C. In accordance with sec.
382(b), I.R.C., R reduced P’s 1998 NOL deduction, for
both regular tax and AMT purposes, to $121,258.
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