The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Mon, 28 Sep 2026 15:45:30 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.11 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Proposed Rules Ease Compliance with Loss Trafficking Rules – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Proposed Rules Ease Compliance with Loss Trafficking Rules https://corpgov.law.harvard.edu/2011/12/20/proposed-rules-ease-compliance-with-loss-trafficking-rules/?utm_source=rss&utm_medium=rss&utm_campaign=proposed-rules-ease-compliance-with-loss-trafficking-rules https://corpgov.law.harvard.edu/2011/12/20/proposed-rules-ease-compliance-with-loss-trafficking-rules/#comments Tue, 20 Dec 2011 14:24:18 +0000 http://blogs.law.harvard.edu/corpgov/?p=24170?d=20150113153114EST Posted by James Morphy, Sullivan & Cromwell LLP, on Tuesday, December 20, 2011
Editor's Note:

James Morphy is a partner at Sullivan & Cromwell LLP specializing in mergers & acquisitions and corporate governance. This post is based on a Sullivan & Cromwell publication; the complete publication, including footnotes, is available here.

Under Section 382 of the Internal Revenue Code, a corporation’s use of net operating losses is limited if there is an “ownership change.” On November 22, 2011, the Department of Treasury issued a Notice of Proposed Rulemaking (the “Notice”) containing proposed regulations (the “Proposed Regulations”) intended to lessen the compliance burden on taxpayers determining whether an ownership change has occurred for these purposes. The Proposed Regulations are based upon and take into account comments received in respect of Notice 2010-49, which announced an IRS study on easing the compliance burden of tracking less-than-5% shareholders for these purposes.

Under the Proposed Regulations, taxpayers no longer have to separately track:

  • certain secondary transfers to a public owner;
  • certain small redemptions; and
  • certain shifts of ownership among small shareholders that indirectly hold shares of a corporation that has net operating losses or related tax attributes.

(more…)

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