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56(a) is then applied to the excess of each member's separate
items of tax preference over the amount, if any, determined under
the 1502-33(d) allocation. Each member's resulting minimum tax,
if any, is then aggregated to derive the UBC affiliated group's
corporate minimum tax.
Under petitioner's method, the aggregate of the members'
separate regular tax deductions, which will be utilized by the UBC
affiliated group to reduce items of tax preference subject to the
15-percent minimum tax, will not equal the consolidated regular
tax liability of the group. That lack of equivalence is a result
of the following: (1) Loss companies are not allocated any
portion of the consolidated regular tax liability, which results
(...continued)
Sec. 1.1502-33(d)(2)(ii), Income Tax Regs., provides:
(ii)(a) The tax liability of the group, as
determined under paragraph (b)(1) of �1.1552-1, shall
be allocated to the members in accordance with
paragraph (a)(1), (2) or (3) of �1.1552-1, whichever is
applicable;
(b) An additional amount shall be allocated to
each member equal to a fixed percentage (which does not
exceed 100 percent) of the excess, if any, of (1) the
separate return tax liability of such member for the
taxable year (computed as provided in paragraph
(a)(2)(ii) of �1.1552-1), over (2) the tax liability
allocated to such member in accordance with (a) of this
subdivision (ii); and
(c) The total of any additional amounts allocated
pursuant to (b) of this subdivision (ii) (including
amounts allocated as a result of a carryback) shall be
credited to the earnings and profits of those members
which had items of income, deductions, or credits to
which such total is attributable pursuant to a
consistent method which fairly reflects such items of
income, deductions, or credits, and which is
substantiated by specific records maintained by the
group for such purpose.
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