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INTERNAL REVENUE CODE OP 19 54 "
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PART V—CARRYOVERS
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Sec. 381. Carryovers in certain corporate acquisitions. Sec. 382. Special limitations on net operating loss carryovers. SEC. 381. CARRYOVERS IN CERTAIN CORPORATE ACQUISITIONS. (a) GENERAL RULE. — I n the case of the acquisition of assets of a
corporation by another corporation— (1) in a distribution to such other corporation to which section 332 (relating to hquidations of subsidiaries) applies, except in a case in which the basis of the assets distributed is determined under section 334(b)(2); or (2) in a transfer to which section 361 (relating to nonrecognition of gain or loss to corporations) applies, but only if the transfer is in connection with a reorganization described in subparagraph (A), (C), (D) (but only if the requirements of subparagraphs (A) and (B) of section 354(b)(1) are met), or (F) of section 368(a)(1), the acquiring corporation shall succeed to and take into account, as of the close of the day of distribution or transfer, the items described in subsection (c) of the distributor or transferor corporation, subject to the conditions and limitations specified in subsections (b) and (c). (b) OPERATING RULES.—Except in the case of an acquisition in connection with a reorganization described in subparagraph (F) of section 368.(a)(1)— (1) The taxable year of the distributor or transferor corporation shall end on the date of distribution or transfer. (2) For purposes of this section, the date of distribution or transfer shall be the day on which the distribution or transfer is completed; except that, under regulations prescribed by the Secretary or his delegate, the date when substantially all of the property has been distributed or transferred may be used if the distributor or transferor corporation ceases all operations, other than liquidating activities, after such date. (3) The corporation acquiring property in a distribution or transfer described in subsection (a) shall not be entitled to carry back a net operating loss for a taxable year ending after the date of distribution or transfer to a taxable year of the distributor or transferor corporation. (c) ITEMS OF THE DISTRIBUTOR OR TRANSFEROR CORPORATION.—
The items referred to in subsection (a) are: (1) N E T OPERATING LOSS CARRYOVERS.—The net operating loss carryovers determined under section 172, subject to the following conditions and limitations: (A) The taxable year of the acquiring corporation to which the net operating loss carryovers of the distributor or transferor corporation are first carried shall be the first taxable year ending after the date of distribution or transfer. (B) In determining the net operating loss deduction, the portion of such deduction attributable to the net operating loss carryovers of the distributor or transferor corporation to the first taxable year of the acquiring corporation ending after the date of distribution or transfer shall be limited to an amount which bears the same ratio to the taxable income (determined without §381
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