Define the term SRLY and explain its significance and application to a consolidated tax return.

A. A SRLY is a separate return loss year which limits the amount of an NOL from a subsidiary that joins the consolidated group to the lesser of (1) the current year's subsidiaries taxable income amount for the year it joins the consolidated group, (2) the consolidated group's taxable income, or (3) the aggregate of the consolidated taxable income amounts for all consolidated return years of the group determined by taking into account only the income member's items of income, gain, deduction, and loss. The rules restrict the use of a SRLY NOL to a group member's cumulative contribution to consolidated taxable income for all consolidated return years.

B. A SRLY is a separate return limitation year which limits the amount of an NOL incurred in a SRLY that may be used in a consolidated return year to the lesser of (1) the aggregate of the consolidated taxable income amounts for all consolidated return years of the group determined by taking into account only the loss member's items of income, gain, deduction, and loss, (2) consolidated taxable income, or (3) the remaining NOL carryover. The rules restrict the use of a SRLY NOL to a group member's cumulative contribution to consolidated taxable income for all consolidated return years.

C. A SRLY is a subgroup return loss year which requires the consolidated group to apply each of the subsidiaries NOL based on the lesser of (1) the current year's subsidiaries taxable income amount for the year it joins the consolidated group, (2) the consolidated group's taxable income, not including the subsidiaries that brought NOL's into the consolidated group, or (3) the remaining NOL carryover. The rules restrict the use of a SRLY NOL to each group member's cumulative taxable income for each year.

D. A SRLY is a subgroup return limitation year which limits the amount of an NOL from a subsidiary that joins the consolidated group to the lesser of (1) the current year's subsidiaries taxable income amount for the year it joins the consolidated group, (2) the consolidated group's taxable income, or (3) the aggregate of the consolidated taxable income amounts for all consolidated return years of the group determined by taking into account only the loss member's items of income, gain, deduction, and loss. The rules restrict the use of a SRLY NOL to each group member's cumulative taxable income for each year.