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reserved subparagraph (4) of section 1.1502-47(m), Income Tax
Regs., was intended and should be construed as petitioners would
have us construe it (namely, as exempting from the general
separate entity method of the regulations ineligible nonlife
companies that previously had been members of an affiliated and
consolidated group), petitioners arguably would be left without
any specific regulatory provision that would support their single
entity method for such nonlife companies. Because section
1503(c)(1) provides that nonlife losses may be taken into account
only as provided in regulations, the absence of any such
regulation might preclude petitioners from taking into account
any of the losses of the ineligible nonlife companies that
previously constituted members of the former INA and PHC Groups.
See Estate of Neumann v. Commissioner, 106 T.C. 216, 219-221
(1996); H Enters. Intl., Inc. v. Commissioner, 105 T.C. 71, 81-83
(1995); Alexander v. Commissioner, 95 T.C. 467, 473 (1990), affd.
without published opinion sub nom. Stell v. Commissioner, 999
F.2d 544 (9th Cir. 1993).
We simply are not persuaded by petitioners' arguments. As
indicated, the regulations in question are legislative in nature.
Pursuant to sections 1502 and 1503(c)(1), the Treasury was given
an express delegation of regulatory authority. Respondent's
interpretation of the legislative regulations in these cases is
sufficiently consistent with section 1503(c)(2) and its
legislative purpose to restrict the use of ineligible nonlife
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