IRS Finalizes Rules on AMT, Apportionment for Controlled Groups

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IRS finalizes regulations (T.D. 9476) that provide guidance to component members of a controlled group of corporations and consolidated groups filing life-nonlife federal income tax returns. The rules clarify and replace portions of two sets of proposed, temporary, and final regulations issued in 2006 and 2007 under tax code Sections 1502 and 1561. The final rules address whether a component member who incurs a loss for a tax year may apply that loss to reduce the combined taxable income or combined alternative minimum taxable income of the controlled group for purposes of determining the additional tax or reduction in the exemption amount, IRS says. The regulations clarify that only component members' positive taxable incomes or positive AMT incomes can be combined for these purposes.