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.
In general, a waiver is obtained by filing the appropriate request and supporting information with the affiliated group's timely filed consolidated tax return, which includes the date of reaffiliation.
1504(a)(3), S may not be reconsolidated as part of the P-T affiliated group since the 60-month waiting period has not passed.
Example 2: Assume the same facts as in Example 1, except that the affiliated group includes only P and S and the S stock was instead purchased by A Corporation on June 30, 1992.