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a separate-member, approach should be used in computing product
liability loss for purposes of section 172(j)(1). In that
context, the Supreme Court stated:
Thus, it is true, as the Government has argued,
that “[t]he Internal Revenue Code vests ample authority
in the Treasury to adopt consolidated return
regulations to effect a binding resolution of the
question presented in this case.” * * * To the extent
that the Government has exercised that authority, its
actions point to the single-entity approach as the
better answer. To the extent the Government disagrees,
it may amend its regulations to provide for a different
one. [Id. at 838.]
Honeywell Inc. v. Commissioner, supra at 631-633, involved
the Commissioner’s contention that certain depreciation
regulations were not intended to cover the taxpayer’s sales of
leased computers to the respective lessees. We rejected as
unpersuasive the Commissioner’s reliance on caselaw “as
establishing a ‘concept’ to override the express language of his
regulations”. Id. at 635. Petitioner draws the parallel that
respondent should not be permitted to invoke the “concept” of the
life-nonlife subgroup to defeat the language of the section 56(f)
regulations. We agree that, notwithstanding various factual and
substantive distinctions, these broad principles from United
Dominion Indus., Inc. v. United States, supra, and Honeywell Inc.
v. Commissioner, supra, ring true here.
While it may be said that the loss limits of section 1503(c)
must be respected in calculating the AMT of a life-nonlife group,
it does not follow that the explicit book income adjustment rules
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