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I want to merge two C corporations in Michigan. I am the…

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I want to merge...

I want to merge two C corporations in Michigan. I am the only shareholder in both. The one I want to merge into the other has a net operating loss. Can I carry this over to the remaining corporation?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

I have a net operating loss in the corporation to be ended and I want to know what will happen to that loss

Submitted: 5 months ago.Category: Tax
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Answered in 7 minutes by:
11/14/2017
Tax Professional: Lev, Tax Advisor replied 5 months ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,714
Experience: Taxes, Immigration, Labor Relations
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IRC Section 382 limits the amount of income that the NOL corporation may offset by the use of its pre-change NOL carryforward when the ownership change.

https://www.law.cornell.edu/uscode/text/26/382

As there is no ownership change in your proposed merger - NOL is not limited and may be fully used by the new created corporation.

Let me know if that answered your question.

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Customer reply replied 5 months ago
How would I reflect this nol on the tax federal tax return? Just show it as an nol in the year it was created in the other corporation?
Tax Professional: Lev, Tax Advisor replied 5 months ago

You must attach a statement that shows all the important facts about the NOL.

Your statement should include a computation showing how you figured the NOL deduction.

If you deduct more than one NOL in the same year, your statement must cover each of them.

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Tax Professional: Lev, Tax Advisor replied 5 months ago

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