Bankruptcy PLR With NOL Preservation Result

Law360, New York (August 23, 2012, 1:47 PM EDT) -- Section 382 of the Internal Revenue Code limits a loss corporation’s ability to use its Net Operating Losses carryforwards following an "ownership change."[1] An ownership change is triggered if one or more "5-percent shareholders" of the loss corporation increase their ownership in the aggregate by more than 50 percentage points during a testing period. Following an ownership change, the "Section 382 limitation" generally reduces the ability to use NOLs to offset taxable income in any post-change year.[2]

A threshold question in examining if a loss company...
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