- 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
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