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regulations as promulgated by the Commissioner. Sec. 1501. As
we see it, petitioner's position ignores those regulations.
Section 1.1502-21A(f), Income Tax Regs., provides the exclusive
method for computing the NOL of a consolidated group. The
computation of the CNOL under section 1.1502-21A(f), Income Tax
Regs., begins with the computation of each member's separate
taxable income under section 1.1502-12, Income Tax Regs.
Accordingly, the CNOL is not computed purely on a consolidated
basis. Moreover, as discussed supra at 12, SLL's are not treated
on a consolidated basis under the consolidated return
regulations. Similarly, there is no provision in the Code for a
consolidated SLL.11 As neither the Code nor the regulations
direct that SLL's are to be treated on a consolidated basis, and,
in light of the general principle that deductions are construed
narrowly, INDOPCO, Inc., v. Commissioner, 503 U.S. 79, 84 (1992);
Commissioner v. National Alfalfa Dehydrating & Milling Co., 417
U.S. 134, 149 (1974), we must reject petitioner's position. See,
e.g., Amtel Inc. v. United States, supra at 602.
Petitioner contends that its position is in harmony with the
underlying purpose of the consolidated return regulations, which
is to tax an affiliated group of corporations as a single
11 By contrast, Congress has directed single entity treatment
for purposes of sec. 172 with respect to corporate equity
reduction interest loss as defined in sec. 172(h). See sec.
172(h)(4)(C).
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