IRC 382 is considered as one of the Code’s most complex sections enacted for preventing “trafficking” in Net Operating losses (NOLs). This section limits the utilization of corporate NOLs against profits in the event of an “ownership change”, hence is of critical importance for corporations with significant NOLs.
In order to assess the availability of NOLs under IRC 382, companies need to conduct a detailed analysis of changes in capital and ownership structure over a three-year period as well as valuation of the company at different dates. Given the complexities involved, companies should be cautious in relying on rough estimations to determine applicability of IRC 382.
CredVal’s extensive experience of dealing with complex capital structures and expertise in business valuation services can help companies to deal with the challenges posed by IRC 382. Our highly qualified professionals work collaboratively with clients to ensure that they stay compliant with the rules and achieve effective corporate tax planning.