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PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4091
Experience:  35 years tax experience, including four years at a Big 4 firm.
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If a c corp has considerable losses ie 13 million... can a

Customer Question

if a c corp has considerable losses ie 13 million... can a new investor place low basis property in c corp and offset gains with the losses ?
Submitted: 10 months ago.
Category: Tax
Expert:  PDtax replied 10 months ago.

Hi from just answer. I'm PDtax. I will assist.

A new owner can use those losses, but they are often subject to limitations when a new owner takes control.

Customer: replied 10 months ago.
if the new owner doesn't take control.. what are rules and or how can the value of these losses be realized as my client has significant wealth.. , was thinking of having his friend who is selling apartment buildings with no basis... contribute one in exchange for stock and selling it in the corp..
Expert:  PDtax replied 10 months ago.

IRC 382 limits the NOL usage to the pre change loss times the long term rate, which these days is low. At 3%, you might be limited to $400,000 per year in useful losses.

Hope that helps. Positive feedback is appreciated. I'm PDtax.

Customer: replied 10 months ago.
I assume by change you mean the new investor coming in... If that didn't could the owner use all he losses if he had a gain large enough maybe 10 million to use. I am happy to read if you can point me or link me to the right info.. How would you use these... Thanks
Expert:  PDtax replied 10 months ago.

Contributing appreciated property won't work. One moment...

Expert:  PDtax replied 10 months ago.

IRC 351 requires gain recognition for transfers of appreciated property unless you meet their control rules.

I've answered your original question and follow-ups, but I can't provide what to do with a loss corp for the price posted.

Expert:  PDtax replied 10 months ago.

Thanks for asking at just answer. Positive feedback for what I did will be appreciated. I'm PDtax.

Customer: replied 10 months ago.
Might be willing to pay more but am looking for detail I saw in other answers and this is not it. I was looking for what we can do.. not tidbits of what we cant.. and teaser for more.. Thanks
Expert:  PDtax replied 10 months ago.

My apologies if we misunderstood each other. I answered the question and follow up, but you already to want planning about what to do, which was not your question.

Sorry we did not meet in the middle. It happens sometimes.

PDtax