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that the consolidated return regulations were not a method of
accounting.
We do not believe that the 1966 regulations undercut the
holdings in Henry C. Beck Builders, Inc. and Henry C. Beck
Co. that the consolidated return regulations are a method of
reporting and not a method of accounting. To the contrary, the
1966 regulations fortify the reasoning contained in Henry C. Beck
Builders, Inc. and Henry C. Beck Co.
Respondent adopted sections 1.1502-12(d) and 1.1502-17,
Income Tax Regs., as part of the 1966 regulations. These
sections provide the rules for determining methods of accounting
and changes in method of accounting under the consolidated return
regulations.
Section 1.1502-12(d), Income Tax Regs., states that the
method of accounting under which the computation of separate
taxable income of each member of the consolidated group is made
and the adjustments to be made because of any change in method of
accounting shall be determined under section 1.1502-17, Income
Tax Regs. Section 1.1502-17, Income Tax Regs., entitled "Methods
of accounting", states that "The method of accounting to be used
by each member of the group shall be determined in accordance
with the provisions of section 446 as if such member filed a
separate return." Thus, each member (and not the group)
determines its method of accounting on a separate company basis--
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