- 14 - for an affiliated group, the numerator of the limiting fraction is an amount equal to the total of the separate taxable incomes of the members of the group from sources without the United States, with certain adjustments that are not material to this case. See sec. 1.1502-4(d)(1), Income Tax Regs. The denominator of the limiting fraction under section 904(a) is the consolidated taxable income of the group computed in accordance with section 1.1502-11, Income Tax Regs. Sec. 1.1502-4(d)(2), Income Tax Regs. Thus, for each of the subject consolidated return years, petitioner was required to compute the "taxable income from sources without the United States" of each member of its affiliated group of corporations. Sec. 904(a). The total of those amounts is the numerator of the limiting fraction under section 904(a). In these proceedings, petitioner seeks to make two changes in the method used to allocate and apportion interest expenses for purposes of computing each member's taxable income from sources without the United States. First, petitioner seeks to apportion the interest expenses of each member of its affiliated group using the asset method described in section 1.861-8(e)(2)(v), Income Tax Regs., for tax years 1982, 1983, and 1984, and using one of the optional gross income methods described by sectionPage: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
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