Since section 382 does not limit a corporation’s ability to utilize NOLs or credits carried back to pre-ownership change tax years, the recent changes in the NOL rules under the CARES Act may allow the Loss Corporation to preserve the value of its NOLs by carrying back such losses to years prior to any such ownership …
What is a SRLY limitation?
The SRLY rules are designed to limit the extent to which a consolidated group can claim a CNOL deduction that is attributable to NOLs generated in years in which the attributable member was not a member of the group.
When does section 382 Nol limitation apply to merger?
If the stock of the NOL corporation is merged or acquired in a tax-free transaction structure (e.g., a cash for stock purchase, a stock for stock exchange, etc.), then the Section 382 NOL limitation applies. The first type of NOL limitation ownership change event is not always so obvious.
Is there a limit to the section 382 limitation?
The amount of the taxable income of any new loss corporation for any post-change year which may be offset by pre-change losses shall not exceed the section 382 limitation for such year. the long-term tax-exempt rate.
When is a change in ownership required under section 382?
Required Change in Ownership Section 382 (“section 382”) applies only after a change, however effected, in ownership of more than 50 percent of the stock (by value) in a loss corporation over a prescribed period of time. See section 382(g). Such a change is referred to as an “ownership change.”
When does section 382 apply to consolidated groups?
In general, the section 382 rules apply to ownership changes that occur on or after January 1, 1987. The earliest testing period begins on May 6, 1986. CONSOLIDATED RETURN ISSUES — OVERVIEW Prior to January 1991, the application of section 382 to consolidated groups was uncertain.
