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    44 PICOP vs. CA

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    Kristie Renz Anne Panes
    Picop merged with RPPM and RMC in 1977. Prior to the merger, RPPM had accumulated losses over several years. On its 1977 tax return, Picop tried to deduct half of RPPM's accumulated losses against its own income from that year. However, the court ruled that Picop was not entitled to deduct losses incurred by RPPM before the merger, as that would allow one corporation to benefit from the losses of another. The deduction claimed by Picop was therefore disallowed.

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    44 PICOP vs. CA

    Uploaded by

    Kristie Renz Anne Panes
    8 views1 page
    Picop merged with RPPM and RMC in 1977. Prior to the merger, RPPM had accumulated losses over several years. On its 1977 tax return, Picop tried to deduct half of RPPM's accumulated losses against its own income from that year. However, the court ruled that Picop was not entitled to deduct losses incurred by RPPM before the merger, as that would allow one corporation to benefit from the losses of another. The deduction claimed by Picop was therefore disallowed.

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    Picop merged with RPPM and RMC in 1977. Prior to the merger, RPPM had accumulated losses over several years. On its 1977 tax return, Picop tried to deduct half of RPPM's accumulated losses against its own income from that year. However, the court ruled that Picop was not entitled to deduct losses incurred by RPPM before the merger, as that would allow one corporation to benefit from the losses of another. The deduction claimed by Picop was therefore disallowed.

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    © All Rights Reserved
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    8 views1 page

    44 PICOP vs. CA

    Uploaded by

    Kristie Renz Anne Panes
    Picop merged with RPPM and RMC in 1977. Prior to the merger, RPPM had accumulated losses over several years. On its 1977 tax return, Picop tried to deduct half of RPPM's accumulated losses against its own income from that year. However, the court ruled that Picop was not entitled to deduct losses incurred by RPPM before the merger, as that would allow one corporation to benefit from the losses of another. The deduction claimed by Picop was therefore disallowed.

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    of 1

    PICOP vs.

    CA
    G.R. Nos. 106949-50; December 1, 1995

    FACTS: In 1977, Picop entered into a merger agreement with the RPPM and
    RMC. Under this agreement, the rights, properties, privileges, powers and
    franchises of RPPM and RMC were to be transferred, assigned and conveyed to
    Picop as the surviving corporation. The Board of Investments approved the
    merger agreement in 1978. Immediately before merger effective date, RPPM
    had over preceding years accumulated losses. In its 1977 Income Tax Return,
    PICOP claimed half of RPPM's accumulated losses as a deduction against its
    1977 gross income.

    ISSUE: W/N Picop is entitled to deduct against current income net operating
    losses incurred by RPPM.

    RULING: No. To allow the deduction claimed by Picop would be to permit


    one corporation or enterprise, Picop, to benefit from the operating losses
    accumulated by another corporation or enterprise, RPPM. To grant Picop's
    claimed deduction would be to permit Picop to shelter its otherwise taxable
    income which had not been earned by the registered enterprise which had
    suffered the accumulated losses. Thus, the claimed deduction must be
    disallowed.

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