Definition
Section 382 of the Internal Revenue Code limits a company�s ability to use net operating loss (NOL) carryforwards after a significant ownership change.
Related Services
This regulation is relevant in tax planning, mergers and acquisitions, and restructuring strategies to minimize tax liabilities.
Problem and Application
Companies with substantial NOLs must carefully structure ownership changes to avoid limitations on tax benefits. Without proper planning, a company may lose the ability to offset future taxable income.
Conclusion
Understanding Section 382 is crucial for tax efficiency, particularly for companies undergoing ownership transitions or seeking to preserve NOLs.
