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Vol. 52, No. 1 - Fall 1998




Comments Regarding Retention of the Consolidated Return SRLY Rules

We urge the Service to retain the separate return limitation year ("SRLY") rules of the consolidated 'return regulations, and thereby continue to prevent single entity treatment of tax attributes arising in SRLYs. Rather than simplifying the consolidated return system, removing the SRLY rules would be destabilizing and lead to new complexity as piecemeal amendments to the Code and regulations are made to respond to problems that would result from the change. ...


Restrictions on Voting Power of Majority Directors and Shareholders Reduced Voting Power to Below Eighty Percent Under Section 1504: Alumax Inc. and Consolidated Subsidiaries v. Commissioner

In Alumax Inc. and Consolidated Subsidiaries v. Commissioner, the Tax Court held that a parent and its subsidiaries were not part of a consolidated group under section 1504(a). The court rejected what it called the "mechanical test" of voting power, traditionally used to calculate the eighty percent control that a parent needs to have...

Percentage of Completion Method Allowed On Sale of Land with Long-Term Construction Obligations; Section 7430 Costs Awarded Despite Fact Issue Was of First Impression: Foothill Ranch Co. Partnership v. Commissioner

In Foothill Ranch Co. Partnership v. Commissioner, the Tax Court ruled that the Service erred in preventing a real estate development partnership from using the percentage of completion method to account for a land sale that involved long-term construction obligations. ...