- 10 - upon AVCO’s redemption of the note, because Paul Revere held the note for 7 years before Paul Revere became in 1985 a member of the Textron group.9 Throughout that 7-year period, Paul Revere and AVCO both had been members of the AVCO group. We disagree with petitioner’s interpretation of the word “nonmember” in section 1.1502-14(d)(4)(i), Income Tax Regs., because it reads that word out of context and in isolation. The salient fact is that Paul Revere, having held the note from the date of its issuance, was a member of the Textron group when the note was redeemed. Petitioner’s reading is incongruous with the purpose of the consolidated return regulations and leads to an unreasonable result. The provisions of the regulation in question must be construed consistently with the framework of the consolidated return regulations, in light of their overall purpose and regulatory scheme. Cf. Albertson’s, Inc. v. Commissioner, 42 F.3d 537, 541 (9th Cir. 1994), affg. 95 T.C. 415 (1990); Woodral v. Commissioner, 112 T.C. 19, 22 (1999); see also Estate of Schwartz v. Commissioner, 83 T.C. 943, 953 (1984) 9 Sec. 1.1502-1(a) and (b), Income Tax Regs., defines “group” and “member” as follows: (a) Group. The term “group” means an affiliated group of corporations as defined in section 1504. See section 1.1502-75(d) as to when a group remains in existence. (b) Member. The term “member” means a corporation (including the common parent) which is included within such group.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
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