"Peter" <moonpeter[at]hotmail.com> wrote:

- quote -

Section 382 generally provides the limitation. If A has an
ownership change of over 50 percentage points the limits
kick in. The annual limit on NOL use will be the value of
the corporation at the date of the ownership change (usually
the price paid) multiplied by the long- term applicable
federal tax-exempt rate (around 4% right now, I think). If
the corporation has built-in gains at the date of the
ownership change, the annual limitation for a year is
increased by any built-in gains recognized that year.

That limitation is the most pre-ownership change NOL that
can be used in a tax year.

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I am trying to find out if there are any limitations on the
use of NOLs after an ownership change. For example, Company
A has $10m worth of NOLs and Company B buys all of the
shares of Company A. Can the $10m of NOLs be used to offset
Company B's income? Section 384 of the (1994) IRS Code
seems to say the answer is "No". Is this true?

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