[Federal Register Volume 75, Number 146 (Friday, July 30, 2010)]
[Rules and Regulations]
[Page 44901]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-18677]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9490]
RIN 1545-BJ12
Extended Carryback of Losses to or From a Consolidated Group;
Correction
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Correcting amendment.
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SUMMARY: This document contains corrections to final and temporary
regulations (TD 9490) that were published in the Federal Register on
Wednesday, June 23, 2010 (75 FR 35643) affecting corporations filing
consolidated returns under section 1502. These regulations contain
rules regarding the implementation of section 172(b)(1)(H) within a
consolidated group and also permit certain acquiring consolidated
groups to elect to waive all or a portion of the pre-acquisition
carryback period pursuant to section 172(b)(1)(H) for specific losses
attributable to certain acquired members.
DATES: This correction is effective on July 30, 2010, and is applicable
on June 23, 2010.
FOR FURTHER INFORMATION CONTACT: Grid Glyer, (202) 622-7930 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final and temporary regulations (TD 9490) that are the subject
of this document are under section 1502 of the Internal Revenue Code.
Need for Correction
As published, the final and temporary regulations (TD 9490) contain
errors that may prove to be misleading and are in need of
clarification.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Correction of Publication
0
Accordingly, 26 CFR part 1 is corrected by making the following
correcting amendments:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 2. Section 1.1502-21T(b)(3)(v) is amended by revising paragraphs
(B), (C)(1), (C)(2), the last sentence of paragraph (E) Example 1(i),
the fourth sentence of paragraph (E) Example 1(iii) and the fourth
sentence of paragraph (E) Example 2(ii) to read as follows:
Sec. 1.1502-21T Net operating losses (temporary).
* * * * *
(B) Taxpayer's taxable income. For purposes of computing the
limitation under section 172(b)(1)(H)(iv) on a Five-Year Carryback to
any consolidated return year from any consolidated return year or
separate return year, taxpayer's taxable income as used in section
172(b)(1)(H)(iv)(I) means consolidated taxable income (CTI) in the
consolidated return year that is the fifth taxable year preceding the
year of the loss. For purposes of the preceding sentence, CTI is
computed without regard to any CNOL deduction attributable to the
particular Five-Year Carryback or any NOL from any member's taxable
year ending on the same date as the taxable year in which the Five-Year
Carryback arises, or any taxable year thereafter.
(C) Limitation on Five-Year Carrybacks to a consolidated group--(1)
Annual limitation. The aggregate amount of Five-Year Carrybacks from
years ending on the same date (Testing Date) to any consolidated return
year may not exceed the excess of 50 percent of the CTI for that year
over the total of Five-Year Carrybacks to that consolidated return year
from years ending before the Testing Date (Annual Limitation). For
purposes of the preceding sentence, CTI is computed without regard to--
(i) Any CNOL deduction attributable to Five-Year Carrybacks to such
year; or
(ii) Any NOL from any member's taxable year ending on the Testing
Date or any taxable year thereafter.
(2) Pro rata absorption of limited and non-limited losses. Any
Five-Year Carryback, and other net operating losses, from years ending
on the same date that are available to offset CTI in the same year are
absorbed on a pro rata basis. See Sec. 1.1502-21(b)(1).
* * * * *
(E) * * *
Example 1. * * * (i) * * * There are no other NOL carrybacks
into the X Group's 2004 consolidated taxable year.
* * * * *
(iii) * * * The Annual Limitation on Five-Year Carrybacks will
be $250 ($500 x 50 percent), with CTI determined without taking into
account the portion of P's 2008 CNOL carried back to the X Group's
2004 consolidated return year or the X Group's 2008 CNOL, which
arises from a taxable year ending on the same date as the Five-Year
Carryback. * * *
Example 2. * * *
(ii) * * * Because S is making the sole Five-Year Carryback to
the X Group's 2004 consolidated return year, S will make a Five-Year
Carryback of the full $400. * * *
* * * * *
LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division,
Associate Chief Counsel (Procedure and Administration).
[FR Doc. 2010-18677 Filed 7-29-10; 8:45 am]
BILLING CODE 4830-01-P