- 16 -
a consolidated basis. The result is an adjustment of $10. As
petitioner observes, if D and E were each treated as a subgroup
of companies and a subgroup approach were employed, the
consequent book income adjustment would be $25 ((($100 - $50) x
.50) attributable to D + $0 (i.e., no adjustment) attributable to
E).
The foregoing provisions therefore confirm that the book
income adjustment for an affiliated group filing a consolidated
return is generally to be computed on a consolidated basis. The
question thus becomes whether an exception to this rule applies
in the case of a life-nonlife group.
B. Application to Life-Nonlife Groups
Life-nonlife groups are distinct from other consolidated
groups principally on account of being subject to the loss limits
of section 1503(c). Legislative history accompanying enactment
of the AMT expressly indicates that Congress intended for the
section 1503 limits to be observed in computing AMT liability, as
follows: “It is clarified that, in light of the parallel nature
of the regular and minimum tax systems, any limitations applying
for regular tax purposes to the use by a consolidated group of
NOLs or current year loses (e.g., section 1503) apply for minimum
tax purposes as well.” H. Conf. Rept. 99-841, at II-283 (1986),
1986-3 C.B. (Vol. 4) 1, 283.
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011