26 C.F.R. § 1.1502-47T   Consolidated returns by life-nonlife groups (temporary).


Title 26 - Internal Revenue


Title 26: Internal Revenue
PART 1—INCOME TAXES
Special Taxes and Taxpayers

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§ 1.1502-47T   Consolidated returns by life-nonlife groups (temporary).

(a) Through (b)(1) [Reserved]. For further guidance, see §1.1502–47(a) through (b)(1).

(2) Tacking rule effective dates. (i) In general. The provisions of paragraph (d)(12)(v) of this section apply to taxable years for which the due date (without extensions) for filing returns is after April 25, 2006.

(ii) Prior law. For taxable years for which the due date (without extensions) for filing returns is on or before April 25, 2006, see §1.1502–47 as contained in the 26 CFR part 1 edition revised as of April 1, 2006.

(c) Through (d)(12)(iv) [Reserved]. For further guidance, see §1.1502–47(c) through (d)(12)(iv).

(v) Tacking rule. The period during which an old corporation is in existence and a member of the group engaged in active business is included in (or tacks onto) the period for the new corporation if the following four conditions listed in this paragraph (d)(12)(v) are met. For purposes of this paragraph (d)(12)(v) and §1.1502–47(d)(12), a new corporation is a corporation (whether or not newly organized) during the period its eligibility depends upon the tacking rule. The four conditions are as follows:

(A) The first condition is that, at any time, 80 percent or more of the new corporation's assets it acquired (other than in the ordinary course of its trade or business) were acquired from the old corporation in one or more transactions described in section 351(a) or 381(a). This asset test is applied by using the fair market values of assets on the date they were acquired and without regard to liabilities. Assets acquired in the ordinary course of business will be excluded from total assets only if they were acquired after the new corporation became a member of the group (determined without section 1504(b)(2)). In addition, assets that the old corporation acquired from outside the group in transactions not conducted in the ordinary course of its trade or business are not included in the 80 percent (but are included in total assets) if the old corporation acquired those assets within five calendar years before the date of their transfer to the new corporation.

(B) The second condition is that at the end of the taxable year during which the first condition is first met, the old corporation and the new corporation must both have the same tax character. For purposes of this paragraph (d)(12), a corporation's tax character is the section under which it would be taxed (i.e., sections 11, 802, 821, or 831) if it filed a separate return. If the old corporation is not in existence (or adopts a plan of complete liquidation) at the end of that taxable year, this paragraph (d)(12)(v)(B) will apply to the old corporation's taxable year immediately preceding the beginning of the taxable year during which the first condition is first met.

(C) The third condition is that, at the end of the taxable year during which the first condition is first met, the new corporation does not undergo a disproportionate asset acquisition under §1.1502–47(d)(12)(viii).

(D) The fourth condition is that, if there is more than one old corporation, the first two conditions apply to all of the corporations. Thus, the second condition (tax character) must be met by all of the old corporations transferring assets taken into account in meeting the test in paragraph (d)(12)(v)(A) of this section.

(vi) Through (s) [Reserved]. For further guidance, see §1.1502–47(d)(12)(vi) through (s).

[T.D. 9258, 71 FR 23857, Apr. 25, 2006]

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