In the United States Supreme Court case, United Dominion Industries, Inc. v. United States (2000), the court ruled in favor of the government regarding a tax dispute with United Dominion Industries. The issue at hand was whether or not consolidated tax returns filed by corporations could be considered as separate entities for purposes of calculating investment credits and deductions under federal law. The company argued that it should be allowed to calculate its taxes based on each individual subsidiary's profits and losses rather than as a single entity which would have resulted in lower overall taxation. However, the Supreme Court disagreed with this argument stating that when filing consolidated returns, all members are treated as components of one affiliated group rather than separate entities thus upholding an earlier decision made by Fourth Circuit Court of Appeals.

The dissenting opinion in the case of United Dominion Industries, Inc. v. United States argued that the majority misinterpreted Section 1.1502-20(c)(1)(iii) of the Income Tax Regulations and its application to consolidated returns by corporations. The dissent believed that this regulation was intended to prevent a parent company from claiming an artificial loss when it sells subsidiary stock at a price below its value on the consolidated return but above what it paid for it originally (the "basis"). They contended that if there is no such artificial loss, then there should be no tax liability under this rule - as was true in this case where United Dominion sold stocks for more than their basis but less than their value on the consolidated return. Therefore, they disagreed with imposing additional taxes based on losses not actually incurred by United Dominion.