[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: 26CFR1.1502-55]

[Page 450-451]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.1502-55  Computation of alternative minimum tax of consolidated groups.

    (a)-(h)(3) [Reserved]
    (h)(4) Separate return year minimum tax credit. (i)-(ii) [Reserved]
    (iii)(A) Limitation on portion of separate return year minimum tax 
credit arising in separate return limitation years. The aggregate of a 
member's minimum tax credits arising in SRLYs that are included in the 
consolidated minimum tax credits for all consolidated return years of 
the group may not exceed--
    (1) The aggregate for all consolidated return years of the member's 
contributions to the consolidated section 53(c) limitation for each 
consolidated return year; reduced by
    (2) The aggregate of the member's minimum tax credits arising and 
absorbed in all consolidated return years (whether or not absorbed by 
the member).
    (B) Computational rules--(1) Member's contribution to the 
consolidated section 53(c) limitation. Except as provided in the special 
rule of paragraph (h)(4)(iii)(B)(2) of this section, a member's 
contribution to the consolidated section 53(c) limitation for a 
consolidated return year equals the member's share of the consolidated 
net regular tax liability minus its share of consolidated tentative 
minimum tax. The group computes the member's shares by applying to the 
respective consolidated amounts the principles of section 1552 and the 
percentage method under Sec. 1.1502-33(d)(3), assuming a 100% 
allocation of any decreased tax liability. The group makes proper 
adjustments so that taxes and credits not taken into account in 
computing the limitation under section 53(c) are not taken into account 
in computing the member's share of the consolidated net regular tax, 
etc. (See, for example, the taxes described in section 26(b) that are 
disregarded in computing regular tax liability.)
    (2) Adjustment for year in which alternative minimum tax is paid. 
For a consolidated return year for which consolidated tentative minimum 
tax is greater than consolidated regular tax liability, the group 
reduces the member's share of the consolidated tentative minimum tax by 
the member's share of the consolidated alternative minimum tax for the 
year. The group determines the member's share of consolidated 
alternative minimum tax for a year using the same method it uses to 
determine the member's share of the consolidated minimum tax credits for 
the year.
    (3) Years included in computation. For purposes of computing the 
limitation under this paragraph (h)(4)(iii), the consolidated return 
years of the group include only those years, including the year to which 
a credit is carried, that the member has been continuously included in 
the group's consolidated return, but exclude any years after the year to 
which the credit is carried.
    (4) Subgroup principles. The SRLY subgroup principles under Sec. 
1.1502-21(c)(2) apply for purposes of this paragraph (h)(4)(iii). The 
predecessor and successor principles under Sec. 1.1502-21(f) also apply 
for purposes of this paragraph (h)(4)(iii).

[[Page 451]]

    (5) Overlap with section 383. The principles under Sec. 1.1502-
21(g) apply for purposes of this paragraph (h)(4)(iii). For example, an 
overlap of this paragraph (h)(4)(iii) and the application of section 383 
with respect to a credit carryover occurs if a corporation becomes a 
member of a consolidated group (the SRLY event) within six months of the 
change date of an ownership change giving rise to a section 383 credit 
limitation with respect to that carryover (the section 383 event), with 
the result that the limitation of this paragraph (h)(4)(iii) does not 
apply. See Sec. Sec. 1.1502-21(g)(2)(ii)(A) and 1.383-1; see also Sec. 
1.1502-21(g)(4) (subgroup rules).
    (C) Effective date--(1) In general. This paragraph (h)(4)(iii) 
generally applies to consolidated return years for which the due date of 
the income tax return (without extensions) is after March 13, 1998. See 
Sec. 1.1502-3(d)(4) for an optional effective date rule (generally 
making this paragraph (h)(4)(iii) also applicable to a consolidated 
return year beginning on or after January 1, 1997, if the due date of 
the income tax return (without extensions) was on or before March 13, 
1998).
    (i) Contribution years. In general, a group does not take into 
account a consolidated taxable year for which the due date of the income 
tax return (without extensions) is on or before March 13, 1998, in 
determining a member's (or subgroup's) contributions to the consolidated 
section 53(c) limitation under this paragraph (h)(4)(iii). However, if a 
consolidated group chooses to apply the optional effective date rule, 
the consolidated group shall not take into account a consolidated 
taxable year beginning before January 1, 1997 in determining a member's 
(or subgroup's) contributions to the consolidated section 53(c) 
limitation under this paragraph (h)(4)(iii).
    (ii) Special subgroup rule. In the event that the principles of 
Sec. 1.1502-21(g)(1) do not apply to a particular credit carryover in 
the current group, then solely for purposes of applying this paragraph 
(h)(4)(iii) to determine the limitation with respect to that carryover 
and with respect to which the SRLY register (the aggregate of the 
member's or subgroup's contribution to consolidated section 53(c) 
limitation reduced by the aggregate of the member's or subgroup's 
minimum tax credits arising and absorbed in all consolidated return 
years) began in a taxable year for which the due date of the return is 
on or before May 25, 2000, the principles of Sec. 1.1502-21(c)(2) shall 
be applied without regard to the phrase ``or for a carryover that was 
subject to the overlap rule described in paragraph (g) of this section 
or Sec. 1.1502-15(g) with respect to another group (the former 
group).''
    (2) Overlap rule. Paragraph (h)(4)(iii)(B)(5) of this section 
(relating to overlap with section 383) applies to taxable years for 
which the due date (without extensions) of the consolidated return is 
after May 25, 2000. For purposes of paragraph (h)(4)(iii)(B)(5) of this 
section, only an ownership change to which section 383, as amended by 
the Tax Reform Act of 1986 (100 Stat. 2095), applies and which results 
in a section 383 credit limitation shall constitute a section 383 event. 
The optional effective date rule of Sec. 1.1502-3(d)(4) (generally 
making this paragraph (h)(4)(iii) also applicable to a consolidated 
return year beginning on or after January 1, 1997, if the due date of 
the income tax return (without extensions) was on or before March 13, 
1998) does not apply with respect to paragraph (h)(4)(iii)(B)(5) of this 
section (relating to the overlap rule).

[T.D. 8884, 65 FR 33759, May 25, 2000]

                Administrative Provisions and Other Rules