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petitioner’s analogy. Although the consolidated return regulations
do speak in terms of a “consolidated net operating loss”, see sec.
1.1502-21(b)(1), Income Tax Regs., it is quite clear that the
consolidated net operating loss is to be determined by taking into
account the “separate” taxable income, including the separate NOL,
of each member of the group. See secs. 1.1502-12, 1.1502-21(f),
Income Tax Regs. The separately determined losses of each member
of the affiliated group do not lose their distinct character (to
the extent that such distinct character is important) upon
consolidation. Cf. Amtel, Inc. v. United States, 31 Fed. Cl. 598,
600 (1994), (“a member of an affiliated group may have a separate
net operating loss with independent significance for income tax
purposes”) affd. without published opinion 59 F.3d 181 (1995).
Moreover, section 172(l)(1) is a special rule that prioritizes a
bank’s losses. Nothing in that section leads us to believe that
Congress intended to give a priority to a bank member’s bad debt
losses as against a nonbank member’s losses in the context of a
consolidated return.
E. Conclusion
As stated, we agree with respondent’s determination of the
appropriate method to determine the bad debt portion of the
consolidated NOL.
Decisions will be entered
under Rule 155.
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