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Marvin,EA, Enrolled Agent
Category: Tax
Satisfied Customers: 1672
Experience:  Enrolled to Represent Taxpayers Before The IRS
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Beazer homes just noted in a press release that because there

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Beazer homes just noted in a press release that because there was an "ownership change" in their stock as defined by SEc 382 they would be precluded from using NOLs. What is the most likely explanation for what occurred.
Submitted: 8 years ago.
Category: Tax
Expert:  Marvin,EA replied 8 years ago.
Hello and thanks you for using Just Answer. After an ownership change, the amount of income that a corporation may offset each year be preacquisition NOL carry forwards is generally limited to an amount determined by multiplying the value of the equity of the corporation just prior to the ownership change by the federal long-term tax-exempt rate in effect on the date of the change (Code Sec. 382(b)(1). Any unused limitation may be carried forward and added to the next year's limitation. In addition, NOL carry forwards are eliminated completely unless the business continuity requirements for reorganizations are satisfied for the two-year period following the ownership change.
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