What is a dual consolidated loss?
Tax Professional Answers
Pursuant to Treas. Reg. § 1.1503-2(c)(4), the term “separate unit” includes a “hybrid entity separate unit,” i.e., an interest in an entity that was not taxable as an association for U.S. federal income tax purposes but is subject to income tax in a foreign country as a corporation (or otherwise at the entity level) either on its worldwide income or on a residence basis.
Treas. Reg. § 1.1503-2(c)(5)(i) provides that the term “dual consolidated loss” means the net operating loss (as defined in IRC § 172(c) and the regulations thereunder) of a domestic corporation incurred in a year in which the corporation is a dual resident corporation.
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