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member would not be affected for any pending taxable year and the
correlative adjustment is therefore not actually made, "such
adjustment shall nevertheless be deemed to have been made" for
purposes of determining the other member's U.S. income tax
liability for a later taxable year or for purposes of determining
any other person's U.S. income tax liability for any taxable
year. Id.
Accordingly, the regulations provide that an appropriate
correlative adjustment, if one is made by the district director,
either "shall actually be made" or "shall nevertheless be deemed
to have been made". Id. In that context, the phrase, "The
correlative adjustment shall actually be made", is merely a
description of the result that occurs when the district director
makes an appropriate correlative adjustment and the U.S. income
tax liability of the other member would be affected for any
pending taxable year, as opposed to a correlative adjustment that
is deemed to have been made. The phrase "shall actually be
made", therefore, does not mandate that a correlative adjustment
always be made but, rather, serves only to describe one of the
two alternative ways of treating an appropriate correlative
adjustment, if one is made by the district director.
Accordingly, we note that the language, "Thus, if the
district director makes an allocation of income, he shall not
only increase the income of one member of the group, but shall
decrease the income of the other member", appears in the sentence
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