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of the affiliated group, which had an NOL of $341,183 and a bad
debt deduction of $136,881, the bad debt portion of the NOL was
determined to be $136,881.
After determining the bad debt portion of each loss bank
member's NOL, UBC allocated the consolidated 1987 NOL among the
group's loss members and, in the case of the loss bank members,
between the bad debt and the nonbad debt portions of their NOLs.
The allocation was made in proportion to the aggregate of the loss
members' NOLs. For example, $41,861 of the consolidated 1987 NOL
was allocated to the bad debt portion of Aurora-South's NOL (The
bad debt portion of Aurora South’s NOL was $136,881; the
consolidated NOL, as adjusted by respondent, was $9,239,383, and
the aggregate of all loss members’ NOLs, as adjusted by respondent
was $38,752,008. So, $32,636 = $136,881 x (9,239,383 �
38,752,008).) The sum of $48,710 of the consolidated 1987 NOL, as
adjusted by respondent, was allocated to the nonbad debt portion of
Aurora-South’s NOL. (The nonbad debt portion of Aurora South’s NOL
was $204,302; $48,710 = $204,302 x (9,239,383 � 38,752,008).)
After allocating the consolidated 1987 NOL among the loss
members, UBC determined the bad debt portion of the consolidated
1987 NOL by aggregating the portions of the consolidated 1987 NOL
allocated to the bad debt portions of the loss bank members' NOLs.
The bad debt portion so determined was $8,731,874, of which
$2,152,283 was attributable to separate return limitation year
(SRLY) bank members and $6,579,591 was attributable to non-SRLY
bank members. Based thereon UBC claimed consolidated 1987 NOL
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