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AMT Adjustments and Preference 1987 1989
Items
Nonlife subgroup $18,508,088 $70,327,213
Life subgroup 915,175 1,361,584
The parties have also stipulated that the ATNOL deduction for
1987, the total amount of which remains in dispute, will include
($189,367,790) attributable to a nonlife subgroup NOL carryover
from 1986.
Discussion
I. General Rules
A. Life-Nonlife Consolidated Returns
Prior to enactment of the Tax Reform Act of 1976 (TRA 1976),
Pub. L. 94-455, sec. 1507, 90 Stat. 1739, nonlife insurance
companies were prohibited from filing consolidated returns with
life insurance companies. See S. Conf. Rept. 94-1236, at 511
(1976), 1976-3 C.B. (Vol. 3) 807, 915. The restrictions sought
to ensure that life insurance companies, traditionally
profitable, paid income tax commensurate with their investment
income, undiminished by the losses of often unprofitable property
and casualty companies. Nichols v. United States, 260 F.3d 637,
642 (6th Cir. 2001); Conn. Gen. Life Ins. Co. v. Commissioner,
177 F.3d 136, 138 (3d Cir. 1999), affg. 109 T.C. 100 (1997).
Economic considerations, however, led Congress to permit
consolidation for years beginning after 1980 in order to
“provide[] substantial relief in the future for casualty
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