100 STAT. 2260
PUBLIC LAW 99-514—OCT. 22, 1986
"(1) in the case where the last component of an ownership change is an owner shift involving a 5-percent shareholder, the s. date on which such shift occurs, and "(2) in the case where the last component of an ownership change is an equity structure shift, the date of the reorganization, "(k) DEFINITIONS AND SPECIAL RULES.—For purposes of this section— "(1) Loss CORPORATION.—The term 'loss corporation' means a corporation entitled to use a net operating loss carryover. Except to the extent provided in regulations, such term includes any corporation with a net unrealized built-in loss. "(2) OLD LOSS CORPORATION.—The term 'old loss corporation' means any corporation with respect to which there is an owner,. ship change— "(A) which (before the ownership change) was a loss corporation, or •5 "(B) with respect to which there is a pre-change loss described in subsection (d)(1)(B). "(3) NEW LOSS CORPORATION.—The term 'new loss corporation' means a corporation which (after an ownership change) is a loss corporation. Nothing in this section shall be treated as implying that the same corporation may not be both the old loss corporation and the new loss corporation. "(4) TAXABLE INCOME.—Taxable income shall be computed with the modifications set forth in section 172(d). "(5) VALUE.—The term 'value' means fair market value. "(6) RULES RELATING TO STOCK.— "(A) PREFERRED STOCK.—Except as provided in regula-
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. tions and subsection (e), the term 'stock' means stock other than stock described in section 1504(a)(4). "(B) TREATMENT OF CERTAIN RIGHTS, ETC.—The Secretary
shall prescribe such regulations as may be necessary— "(i) to treat warrants, options, contracts to acquire stock, convertible debt interests, and other similar interests as stock, and "(ii) to treat stock as not stock, "(C) DETERMINATIONS ON BASIS OF VALUE.—Determina-
tions of the percentage of stock of any corporation held by any person shall be made on the basis of value. "(7) 5-PERCENT SHAREHOLDER.—The term '5-percent shareholder' means any person holding 5 percent or more of the stock of the corporation at any time during the testing period. "(1) CERTAIN ADDITIONAL OPERATING RULES.—For purposes of this section— "(1) CERTAIN CAPITAL CONTRIBUTIONS NOT TAKEN INTO ACCOUNT.— fA "(A) IN GENERAL.—Any capital c o n t r i b u t i o n received by
a n old loss corporation a s part of a p l a n a principal purpose of which is to avoid or increase any limitation under this
section shall not be taken into account for purposes of this section. "(B) CERTAIN CONTRIBUTIONS TREATED AS PART OF PLAN.—
For purposes of subparagraph (A), any capital contribution made during the 2-year period ending on the change date shall, except as provided in regulations, be treated as part of a plan described in subparagraph (A).
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