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without regard to this subsection and the
alternative tax net operating loss
deduction).
(2) Adjusted net book income.--For purposes
of this subsection--
(A) In general.--The term “adjusted net
book income” means the net income or loss of
the taxpayer set forth on the taxpayer’s
applicable financial statement, adjusted as
provided in this paragraph.
* * * * * * *
(C) Special rules for related
corporations.--
(i) Consolidated returns.--If the
taxpayer files a consolidated return for
any taxable year, adjusted net book
income for such taxable year shall take
into account items on the taxpayer’s
applicable financial statement which are
properly allocable to members of such
group included on such return.
(Sec. 56(f) was enacted as part of the Tax Reform Act of 1986,
Pub. L. 99-514, sec. 701(a), 100 Stat. 2320, and repealed by the
Omnibus Budget Reconciliation Act of 1990, Pub. L. 101-508, sec.
11801(a)(3), 104 Stat. 1388.)
Additional rules pertaining to the book income adjustment in
the context of consolidated returns are contained in regulations
promulgated under section 56. Section 1.56-1(a)(3), Income Tax
Regs., specifies generally:
In the case of a taxpayer that is a consolidated group,
the book income adjustment equals 50 percent of the
amount, if any, by which its consolidated adjusted net
book income (as defined in paragraph (b)(3)(i) of this
section) exceeds its consolidated pre-adjustment
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