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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, $32,636 of the
consolidated 1987 NOL (as adjusted by respondent) 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.
Thus, $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, respondent, in the notice, like UBC on the Form 1139,
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 $6,263,417, of which $1,677,978 was
attributable to SRLY bank members and $4,585,439 was attributable
to non-SRLY bank members. Based thereon the notice allowed NOL
carrybacks to the UBC affiliated group's taxable year 1977 of
$4,585,439 (non-SRLY bank members) and taxable year 1981 of
$268,839 (SRLY carryback).
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