Connecticut General Life Insurance Company - Page 11

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            35 percent of the income of the life companies, whichever is                                 
            less.1  Section 1503(c)(1) provides in part as follows:                                      

                        (1) In general--If an election under section                                     
                  1504(c)(2) is in effect for the taxable year and the                                   
                  consolidated taxable income of the * * * [nonlife                                      
                  members of the group] results in a consolidated net                                    
                  operating loss for such taxable year, then under                                       
                  regulations prescribed by the Secretary, the amount of                                 
                  such loss which cannot be absorbed in the applicable                                   
                  carryback periods against the taxable income of such                                   
                  * * * [nonlife members of the group] shall be taken                                    
                  into account in determining the consolidated taxable                                   
                  income of the affiliated group for such taxable year to                                
                  the extent of 35 percent of such loss or 35 percent of                                 
                  the taxable income of the * * * [life members of the                                   
                  group], whichever is less. * * *                                                       

                  Section 1503(c)(2) provides a further specific limitation on                           
            the use of nonlife losses to reduce life income where the                                    
            particular nonlife losses that are involved are realized by                                  
            companies that were not, for the immediately preceding 5 years,                              
            part of the same affiliated group that is now filing a                                       
            consolidated Federal income tax return.  Section 1503(c)(2)                                  
            provides in pertinent part as follows:                                                       

                  a net operating loss for a taxable year of a * * *                                     
                  [nonlife member of the group] shall not be taken into                                  
                  account in determining the taxable income of a * * *                                   
                  [life member of the group] if such taxable year                                        
                  precedes the sixth taxable year such members have been                                 
                  members of the same affiliated group * * *.                                            


            1     For 1982, sec. 1503(c)(1) limits the losses that are                                   
            allowed to reduce life income to 30 percent of the income of the                             
            life companies or 30 percent of the nonlife CNOL, whichever is                               
            less.                                                                                        




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Last modified: May 25, 2011