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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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