26 C.F.R. § 1.1502-80   Applicability of other provisions of law.


Title 26 - Internal Revenue


Title 26: Internal Revenue
PART 1—INCOME TAXES
Administrative Provisions and Other Rules

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§ 1.1502-80   Applicability of other provisions of law.

(a) In general. The Internal Revenue Code, or other law, shall be applicable to the group to the extent the regulations do not exclude its application. Thus, for example, in a transaction to which section 381(a) applies, the acquiring corporation will succeed to the tax attributes described in section 381(c). Furthermore, sections 269 and 482 apply for any consolidated year. Section 304 applies except as provided in paragraph (b) of this section.

(b) Non-applicability of section 304. Section 304 does not apply to any acquisition of stock of a corporation in an intercompany transaction or to any intercompany item from such transaction occurring on or after July 24, 1991.

(c) Deferral of section 165. For consolidated return years beginning on or after January 1, 1995, stock of a member is not treated as worthless under section 165 before the stock is treated as disposed of under the principles of §1.1502–19(c)(1)(iii). See §§1.1502–11(d) and 1.1502–35 for additional rules relating to stock loss. For further guidance, see §1.1502–80T(c).

(d) Non-applicability of section 357(c)—(1) In general. Section 357(c) does not apply to any transaction to which §1.1502–13, §1.1502–13T, §1.1502–14, or §1.1502–14T applies, if it occurs in a consolidated return year beginning on or after January 1, 1995. For example, P, S, and T are members of a consolidated group, P owns all of the stock of S and T with bases of $30 and $20, respectively, S has a $30 basis in its assets and $40 of liabilities, and S merges into T in a transaction described in section 368(a)(1)(A) (and in section 368(a)(1)(D)); section 357(c) does not apply to the merger, P's basis in T's stock increases to $50 ($30 plus $20), and T succeeds to S's $30 basis in the assets transferred subject to the $40 liability. Similarly, if S instead transferred its assets and liabilities to a newly formed subsidiary in a transaction to which section 351 applies, section 357(c) does not apply and S's basis in the subsidiary's stock is a $10 excess loss account. This paragraph (d) does not apply to a transaction if the transferor or transferee becomes a nonmember as part of the same plan or arrangement. The transferor (or transferee) is treated as becoming a nonmember once it is no longer a member of a consolidated group that includes the transferee (or transferor). For purposes of this paragraph (d), any reference to a transferor or transferee includes, as the context may require, a reference to a successor or predecessor.

(2) Prior period transactions. If, in a tax year beginning before January 1, 1995, a member's stock with an excess loss account is transferred in a transaction to which §1.1502–13, §1.1502–13T, §1.1502–14, or §1.1502–14T applies, paragraph (d)(1) of this section applies to the stock transfer to the extent that the income, gain, deduction, or loss (if any) is not taken into account in a tax year beginning before January 1, 1995. For example, if P, S, and T, are members of a consolidated group, T's stock has an excess loss account, and P transfers the T stock to S in 1993 in a transaction to which section 351 and §1.1502–13 apply, section 357(c) applies to the transfer only to the extent P's gain is taken into account in tax years beginning before January 1, 1995.

(e) Non-applicability of section 163(e)(5). Section 163(e)(5) does not apply to any intercompany obligation (within the meaning of §1.1502–13(g)) issued in a consolidated return year beginning on or after July 12, 1995.

(f) Non-applicability of section 1031. Section 1031 does not apply to any intercompany transaction occurring in consolidated return years beginning on or after July 12, 1995.

[T.D. 8402, 57 FR 9385, Mar. 18, 1992, as amended by T.D. 8560, 59 FR 41703, Aug. 15, 1994; T.D. 8597, 60 FR 36710, July 18, 1995; T.D. 8677, 61 FR 33325, June 27, 1996; T.D. 8597, 62 FR 12098, Mar. 14, 1997; T.D. 9048, 68 FR 12291, Mar. 14, 2003; T.D. 9118, 69 FR 12801, Mar. 18, 2004; T.D. 9192, 70 FR 14411, Mar. 22, 2005; T.D. 9254, 71 FR 13018, Mar. 14, 2006]

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