[Code of Federal Regulations]
[Title 26, Volume 12]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.1502-27]

[Page 368-369]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.1502-27  Consolidated section 247 deduction.

    (a) Amount of deduction. The consolidated section 247 deduction for 
the taxable year shall be an amount computed as follows:
    (1) First, determine the amount which is the lesser of:
    (i) The aggregate of the dividends paid (within the meaning of 
section 247(a)) during such year by members of the group which are 
public utilities (within the meaning of section 247(b)(1)) on preferred 
stock (within the meaning of section 247(b)(2)), other than dividends 
paid to other members of the group, or
    (ii) The aggregate of the taxable income (or loss) (as determined 
under paragraph (b) of this section) of each such member which is a 
public utility.
    (2) Then, multiply the amount determined under subparagraph (1) of 
this paragraph by the fraction specified in section 247(a)(2).
    (b) Computation of taxable income. For purposes of paragraph 
(a)(1)(ii) of this section, the taxable income (or loss) of a member of 
the group described in paragraph (a)(1)(i) shall be determined under 
Sec. 1.1502-12, adjusted for the following items taken into account in 
the computation of consolidated taxable income:
    (1) The portion of the consolidated net operating loss deduction, 
the consolidated charitable contributions deduction, and the 
consolidated dividends received deduction, attributable to such member;
    (2) Such member's capital gain net income (net capital gain for 
taxable years beginning before January 1, 1977) (determined without 
regard to any net capital loss carryover or carryback attributable to 
such member);
    (3) Such member's net capital loss and section 1231 net loss, 
reduced by

[[Page 369]]

the portion of the consolidated net capital loss attributable to such 
member; and
    (4) The portion of any consolidated net capital loss carryover or 
carryback attributable to such member which is absorbed in the taxable 
year.

[T.D. 6894, 31 FR 11794, Sept. 8, 1966, as amended by T.D. 7728, 45 FR 
72650, Nov. 3, 1980]