Here is an excerpt from IRS Private Letter Ruling 8001010:
This group, of which Corp Y is a member is collectively known as
B. Corp Y elected to use C and claimed D in its taxable income
(loss) computation included in the consolidated tax return for
the year A.
E provides, in effect that, if F is used in G, then no D or C
will be allowed. The H issued a I on J that was deemed to be F
by the Internal Revenue Service in K. Corp Y has L at the time
of your request.