-6-
(computed on a separate return basis) bore to the sum of the
separate return regular taxes of all the members. An additional
amount of tax was then allocated to each member that had positive
taxable income. The additional amount allocated was the excess of
the member's separate return tax over the tax already allocated to
the member.
As support for its computation of its corporate minimum tax,
petitioner posits that, in the absence of specific statutory or
regulatory guidance, it was reasonable for petitioner to calculate
the section 56(c) deduction for "taxes imposed" by using the
methodology set forth in the consolidated return regulations.
Petitioner contends that its calulation of the section 56(c)
regular tax deduction "simply followed the dictates" of that part
of section 1.1552-1(b)(2), Income Tax Regs., which provides:
The amount of tax liability allocated to a corporation as
its share of the tax liability of the group * * * [under
the 1502-33(d) Method] shall (i) result in a decrease in
the earnings and profits of such corporation in such
amount, and (ii) be treated as a liability of such
corporation for such amount. * * * (Emphasis added.)
As previously noted, section 1.1502-33(d), Income Tax Regs.,
relates to the allocation of the group’s tax in determining a
member’s earnings and profits. We fail to see any meaningful
relationship between the allocation required in section 1552 and
the determination of the regular tax deduction for purposes of
section 56.
Further, petitioner quotes only a portion of section 1.1552-
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