The ruling holds that, similar to the proposed regulations, if an affiliated group member borrows from an unrelated party and directly loans the funds to a related dealer affiliate for the purpose of carrying on the dealer's general business, the disallowed interest expense allocation is both calculated and applied at the dealer level.
265(a)(2) when an affiliated group member borrows from an unrelated party and directly contributes the funds to the capital of a dealer subsidiary for use in its general operations, rather than loaning the dealer the funds.
Example 3: P, the common parent of an affiliated group that includes subsidiary S (a dealer in exempt obligations), borrows $40 from unrelated lender X.
The second change to the consolidated return rules added by the DRA was a five-year waiting period between a corporation's disaffiliation and reconsolidation with the same affiliated group.
These rulings have permitted reconsolidation when the taxpayer established that the disaffiliation and reconsolidation did not secure for any of the affiliated groups or corporations involved the benefit of any deduction, credit or other allowance that would not otherwise have been available if disaffiliation and reconsolidation had not taken place.
Issuance of additional stock: When stock is issued to an entity or individual that is not a part of the affiliated group, the ownership interest of the affiliated group may fall below the 80% -of-voting-power and 80%-of-value minimums.
The overriding factor cited in the letter rulings for securing a waiver is that the parent corporation must be able to represent that the disaffiliation and reconsolidation will not secure for any affiliated group, member of the affiliated group or person the benefit of any deduction, credit or other allowance that would not have been secured had disaffiliation and reconsolidation not occurred.
91-71) had to be used in lieu of a letter ruling request by any affiliated group that met its conditions.
Regardless of the circumstances surrounding the disaffiliation and reaffiliation, a waiver must be requested and received if the entire affiliated group is to file a consolidated return within 60 months after the beginning of its first tax year in which the subsidiary was not a member of the group.
For example, as described in the fact situations in several rulings, stock options may be granted without careful calculations, or the exercise of stock options may occur with greater frequency than anticipated, and too many shares of a subsidiary corporation's stock may be in the hands of individuals and entities outside the affiliated group.
Under these and other similar circumstances, the affiliated group must request a waiver to file a consolidated return once sufficient ownership is returned to the group members.
The Pillsbury Company and Affiliated Foods Southwest are both committed to making a difference in our communities.
The "Giggles for Charity Challenge" is a way for Affiliated Foods Southwest customers to take advantage of specially priced Pillsbury products, contribute to Team Affiliated Charity Classic and have a lot of fun.
Affiliated Foods Southwest has a long history of supporting youth issues and programs.
Affiliated Foods Southwest is a grocery cooperative established in 1947 by a group of four or five small stores.