One of the advantages of filing a consolidated tax return is that the losses incurred by members can be used to host the income of other members. However, if a member`s loss is absorbed by the consolidated group, the member cannot use that loss to protect the income it will generate in the future. Therefore, tax allocation agreements should determine whether and how class members will be compensated for the use of their tax attributes (for example. B operating losses, excess capital losses, tax credits). Because consolidated groups are not static, additional problems can arise when a member leaves a group that has an agreement that takes a “wait-and-see” approach.