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That reserved subparagraph states merely as follows: “Acquired
Groups. [Reserved.]”.
Petitioners note further that in the preamble accompanying
section 1.1502-47, Income Tax Regs., a comment is made to the
effect that applying petitioners' single entity method to
ineligible nonlife companies that in prior years constituted
members of a consolidated group may be appropriate in certain
situations.
The preamble states in relevant part:
Finally, the Treasury Department will study
further whether it is appropriate to aggregate the
income and losses of ineligible members in certain
cases. For instance, notwithstanding the ordinary
reading of section 1503(c)(2), it may be consistent
with the intent of section 1503(c)(2), or correct as a
matter of policy, to aggregate the income and losses of
ineligible members that filed a consolidated return
prior to their acquisition by * * * another group that
files a consolidated return. [T.D. 7877, 1983-1 C.B.
207, 212.]
Due primarily to the presence of the above reserved
subparagraph for acquired consolidated groups and due to the
above language from the preamble to the regulations, petitioners
argue that the separate entity treatment for ineligible nonlife
companies that is provided in section 1503(c)(2) and section
1.1502-47(m)(3)(vi), Income Tax Regs., should itself be limited
and should not apply to ineligible nonlife companies that
previously constituted an affiliated group and that filed
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