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alternative minimum taxable income (as defined in
paragraph (b)(3)(iii) of this section). See paragraph
(a)(4), Example (4) of this section. * * *
The referenced definition of consolidated adjusted net book
income provides that the term means consolidated net book income
after taking into account certain enumerated adjustments. Sec.
1.56-1(b)(3)(i), Income Tax Regs. Consolidated net book income,
in turn, “is the income or loss of a consolidated group as
reported on its applicable financial statement”. Sec. 1.56-
1(b)(3)(ii), Income Tax Regs. The applicable financial statement
of a consolidated group “is the financial statement of the common
parent” with the highest priority under ordering rules set forth
in the regulatory section. Sec. 1.56-1(c)(5)(i), Income Tax
Regs. Adjustments made to such financial statement include the
addition of book income attributable to members of the
consolidated group excluded from the applicable financial
statement. Sec. 1.56-1(d)(6)(i), Income Tax Regs.
Consolidated preadjustment AMTI is explained as “the taxable
income of the consolidated group”, determined with the
modifications prescribed in sections 56, 57, and 58 (except for
the book income adjustment and the ATNOL). Sec. 1.56-
1(b)(3)(iii), Income Tax Regs.
Example (4) of section 1.56-1(a)(4), Income Tax Regs.
(hereinafter Example 4), illustrates the foregoing principles as
follows:
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