Target corporation's net operating losses
The liaison meeting between the Canada Revenue Commission and Tax Executives Institute covered a wide range of income tax topics including audit procedures, advance pricing agreements and transfer pricing, nonresident taxation, mortgage interest, and replacement property. Other topics included offshore finance companies, tax harmonization, provincial allocation issues, and amalgamation-related administrative questions. Large corporation tax issues concerning outstanding cheques, unrealized foreign exchange gains/losses, and the hedging of corporate debt were also discussed.
State legislatures should adopt tax treatment of net operating losses transferred in a corporate acquisition that is consistent with IRC section 381. Some states currently do not allow corporations to carryforward these losses because of a strict reading of who the "taxpayer" is that is allowed to take the loss deductions, even when the new corporation is functionally identical to the corporation that incurred the losses. States that allow corporations to transfer assets without income tax recognition should also allow other tax attributes, such as net operating losses, to be transferred.
IRC Section 382 imposes restrictions on the use of a corporation's net operating losses (NOL) and other carryovers after an ownership change occurs. An ownership change is a greater than 50 percentage point increase by 5% shareholders during the testing period, which is generally three years. These restrictions limit the amount of a corporation's pre-change losses that can be used in a tax year. The annual limitation is equal to the value of the loss corporation immediately before the ownership change, multiplied by the long-term tax-exempt rate. The annual limitation is increased each year to the extent that there is an unused limitation in a prior year.
... net operating loss of a dual resident corporation incurred in tax years beginning after December 31,... taxable year, regardless of whether those losses offset income of another corporation under the inc...
Recent stories regarding investment losses due to theft and embezzlement have been eclipsed by the sudden, multibillion-dollar collapse of Bernard L Madoff Investment Securities LLC. Investors and their advisors are evaluating the tax implications and looking for opportunities to mitigate the damages. As such, it is an appropriate time to take a closer look at the requirements for the and how to place these rules into perspective. Internal Revenue Code (IRC) section 165 provides the framework for . Such losses may be claimed as a deduction in the year in which the taxpayer discovers the loss. Losses incurred as a result of Madoff's alleged fraud scheme were discovered in 2008, meaning that prong of the statutory requirement has ...
... to Securities Investor Protection Corporation (SIPC) recovery, restitution, asset availability f...
... entered into an agreement with a corporation wholly owned by respondent Bollinger, which provid...Income and losses from the complexes were reported on the partnershi...
The calculation of net unrealized built-in gain required at the time of election of S corporation status under IRC section 1374 may pose problems for cash-basis professional corporations. The unrealized built-in gain and loss calculations are used to determine taxation of realized built-in gain during the recognition period subsequent to the election. Planning steps should be taken to make sure that accrued compensation liabilities are actually paid out in the first two and one half months of the S corporation's tax year to maximize recognition of built-in losses.
CINCINNATI, June 13, 2011 /PRNewswire/ -- Cincinnati Financial Corporation (Nasdaq: CINF) today announced that The Cincinnati Insurance Companies' property casualty group expects its second- quarter results to include pre-tax catastrophe losses, net of reinsurance, of approximately $240 million to $290 million incurred due to severe weather during the entire months of April and May. This total includes the company's previously announced catastrophe loss estimate for April storms, which has now been updated to approximately $155 million to $190 million, net of reinsurance. Catastrophe losses affect property casualty insurance underwriting income, one of the sources of consolidated net income along with profits from investment operations and life insurance operations. (Logo: http://photos...
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