- 11 -
belong. See, e.g., Sealy Corp. v. Commissioner, 107 T.C. 177,
186 (1996).9 Additionally, respondent contends that, even if the
deductions for the taxes and interest in issue qualify as SLL's
under section 172(f)(1)(B), petitioner is not entitled to a
carryback for those deductions because they were not taken into
account in computing the group's CNOL for the year as required by
section 172(f)(1). Respondent asserts that the deductions in
issue were not taken into account in computing the group's 1992
CNOL because they were exhausted by Lynchburg's 1992 separate
income.
The first issue we consider is whether the deductions for
the taxes and interest in issue were taken into account in
computing the NOL for the year as required by section 172(f)(1).
Lynchburg, with gross income in excess of allowable deductions,
had no NOL for 1992. See sec. 172(c). Accordingly, none of the
deductions in issue were taken into account in computing an NOL
with respect to Lynchburg. Accordingly, we must decide whether
the deductions in issue were taken into account in the
computation of the group's 1992 CNOL.
A review of section 172 and the consolidated return
regulations reveals that a member with separate taxable income
cannot contribute to the group's CNOL. Although the consolidated
9 In light of our holding, infra, it is unnecessary for us to
reach this issue.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011