- 18 -
is factually on point with the instant case,14 we cited both
cases in our analysis above because they offer insight into the
operation of the consolidated return regulations as they relate
to the NOL of a consolidated group.
In light of our holding that the deductions for the taxes
and interest in issue do not qualify as SLL's within the meaning
of section 172(f), because they were not taken into account in
the computation of the group's CNOL as required by section
172(f)(1), it is unnecessary to reach the parties' arguments
concerning the application of section 172(f)(1)(B) and (f)(2) to
the instant case.
13(...continued)
I.R.C. 1954, and the consolidated return regulations. The court
found that the parent of a consolidated group could carry back,
to a consolidated year, product liability losses (PLL's), as
defined in sec. 172(j), I.R.C. 1954, attributable to a member of
the group that had separate taxable income. Sec. 172(j), I.R.C.
1954, defined a PLL as the lesser of the NOL or the sum of the
deductions attributable to expenses related to product liability.
The court concluded that because the individual member's PLL's
were less than the group's CNOL, the group was entitled to carry
back the member's PLL deductions. United Dominion is clearly
distinguishable from the instant case because sec. 172(j), I.R.C.
1954, predecessor to sec. 172(f)(1)(A), did not contain the
language in sec. 172(f)(1) which limits SLL's to those that are
taken into account in the computation of the NOL for the year.
14 Amtel Inc. v. United States, 31 Fed. Cl. 598, 602 (1994)
affd. 59 F.3d 181 (1995), concerned the carryback of product
liability losses as defined in sec. 172(j), predecessor to sec.
172(f)(1)(A), to a separate return year. Norwest Corp. and Subs.
v. Commissioner, 111 T.C. 105, 170 (1998), concerned the
carryback of a consolidated group's CNOL attributable to bank
member's bad debts under sec. 172(b)(1)(L).
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