Interpreting CERT Regulation After 23 Years

Law360, New York (September 25, 2012, 1:10 PM EDT) -- Twenty-three years after it was enacted in 1989, the U.S. Department of the Treasury issued proposed regulations interpreting Section 172(h), the corporate equity reduction transaction (CERT) loss carryback disallowance rule dating from the heyday of the leveraged buyouts. Most of us have tried to remember this rule as one aimed at preventing carrying back a loss generated by large interest deductions, and obtaining a refund, when the loan causing the interest deductions was incurred to make a large equity purchase — hence a “corporate equity reduction.”...
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