§ 1.41-6T - Aggregation of expenditures (temporary).

§ 1.41-6T. Aggregation of expenditures (temporary).

Cross Reference

Link to an amendment published at 83 FR 13185, Mar. 28, 2018.

(a) through (b) [Reserved]. For further guidance, see § 1.41-6(a) through (b).

(c) Allocation of the group credit. The group credit is allocated to each member of the controlled group on a proportionate basis to its share of the aggregate of the qualified research expenses, basic research payments, and amounts paid or incurred to energy research consortiums (collectively “QREs” for purposes of paragraphs (c), (d), and (e) of this section) taken into account for the taxable year by such controlled group for purposes of the credit.

(d) Special rules for consolidated groups -

(1) In general. For purposes of applying paragraph (c) of this section, members of a consolidated group who are members of a controlled group are treated as a single member of the controlled group.

(2) [Reserved]. For further guidance, see § 1.41-6(d)(2).

(3) Special rule for allocation of group credit among consolidated group members. The portion of the group credit that is allocated to a consolidated group is allocated to each member of the consolidated group on a proportionate basis to its share of the aggregate of the QREs taken into account for the taxable year by such consolidated group for purposes of the credit.

(e) Examples. The following examples illustrate the provisions of paragraphs (c) and (d) of this section.

Example 1.

Controlled group. A, B, and C are a controlled group. A had $100x, B $300x, and C $500x of qualified research expenses for the year, totaling $900x for the group. A, in the course of its trade or business, also made a payment of $100x to an energy research consortium for energy research. The group's QREs total 1000x and the group calculated its total research credit to be $60x for the year. Based on each member's proportionate share of the controlled group's aggregate QREs, A is allocated $12x, B $18x, and C $30x of the credit.

Example 2.

Consolidated group is a member of controlled group. The controlled group's members are D, E, F, G, and H. F, G, and H file a consolidated return and are treated as a single member (FGH) of the controlled group. D had $240x, E $360x, and FGH $600x of qualified research expenses for the year ($1,200x aggregate). The group calculated its research credit to be $100x for the year. Based on the proportion of each member's share of QREs to the controlled group's aggregate QREs for the taxable year D is allocated $20x, E $30x, and FGH $50x of the credit. The $50x of credit allocated to FGH is then allocated to the consolidated group members based on the proportion of each consolidated group member's share of QREs to the consolidated group's aggregate QREs. F had $120x, G $240x, and H $240x of QREs for the year. Therefore, F is allocated $10x, G is allocated $20x, and H is allocated $20x.

(f) through (i) [Reserved]. For further guidance, see § 1.41-6(f) through (i).

(j)

(1) through (3) [Reserved]. For further guidance, see § 1.41-6(j)(1) through (3).

(4) Taxable years beginning after December 31, 2011. Section 1.41-6T is applicable for taxable years beginning on or after April 3, 2015. Taxpayers may apply § 1.41-6T to taxable years beginning after December 31, 2011, but before April 3, 2015. For a taxpayer that does not apply § 1.41-6T to a taxable year beginning after December 31, 2011, but before April 3, 2015, the guidance that applies to such taxable year is contained in Notice 2013-20 (2013-15 IRB 902).

(5) Taxable years beginning before January 1, 2012. See § 1.41-6 as contained in 26 CFR part 1, revised April 1, 2014.

(6) Expiration date. The applicability of § 1.41-6T expires on April 2, 2018.

[T.D. 9717, 80 FR 18098, Apr. 3, 2015]