Rev. Rul. 74-483

Y corporation was incorporated on June 30, 1972, and filed a Federal income tax return for the period from June 30, 1972 through February 28, 1973 as a separate company. On March 1, 1973, all of the outstanding stock of Y corporation was purchased by X corporation, whose taxable year ends on May 31. X and Y thus constituted an "affiliated group" under section 1504(a) of the Internal Revenue Code of 1954. On March 31, 1973, all of Y's assets were transferred to X in complete liquidation of Y qualifying under sections 332 and 334(b)(2). As of March 31, 1973, therefore, X no longer owned stock in Y. For its taxable year ended May 31, 1973, X and Y filed a consolidated Federal income tax return reporting therein the income of X for the 12 month period ending May 31, 1973 and the income of Y for the period from March 1, 1973 to March 31, 1973.

Held, the fact that Y was liquidated prior to the end of X's taxable year does not prevent X and Y from filing a consolidated return under the provisions of section 1501 of the Code for such taxable year, provided all of the requirements for the filing of a consolidated return are met. Such a consolidated return properly includes the income of the parent corporation for the entire taxable year and the income of the subsidiary for the portion of the taxable year during which it was a member of the group. See section 1.1502-76(b) of the Income Tax Regulations.