119 T.C. No. 21
UNITED STATES TAX COURT
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY AND SUBSIDIARIES,
Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 1859-01. Filed December 19, 2002.
P is an affiliated group of corporations filing a
consolidated Federal income tax return. The group
comprises both life and nonlife insurance companies,
referred to as the life subgroup and the nonlife
subgroup, respectively. P became subject to the
alternative minimum tax (AMT) for 1987 as a result of
events in 1989 generating a nonlife subgroup net
operating loss carryback from 1989 to 1987. For
purposes of determining its AMT liability, P calculated
the book income adjustment on a consolidated basis. R
maintains that the book income adjustment is to be made
on a subgroup basis, with a separate adjustment for
each subgroup.
Held: In the context of a life-nonlife consolidated
return, the AMT book income adjustment is to be made using a
consolidated approach, with a single adjustment for the
entire group.
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