Rather, the calculation is to determine if the loss corporation can increase its Section 382 limitation for the post-change period by an additional amount of "deemed amortization," and thus loss corporations in a NUBIG
position may be able to alleviate somewhat the burden of undergoing an ownership change, during the five-year period after the ownership change date.
In determining whether the threshold amounts have been met, the amount of the NUBIG
or NUBIL is adjusted for amounts that would be treated as built-in gains or losses if such amounts were properly taken into account during the recognition period.
Consistent with the principles that apply to the determination of NUBIG
, the regulations provide, in effect, that the inventories must be valued using a "bulk sale" approach.
A loss corporation with a NUBIG
in its assets immediately before an ownership change may generally increase its Sec.
Each acquisition of assets from a C corporation is subject to a separate determination of NUBIG
and a separate 10-year recognition period beginning the day the assets are acquired.
Note: X's NUBIG
would be reduced by the Z stock's BIG, because it is now reflected as a separate pool.
Thus, the potential loss limit is capped by the NUBIG
The subsidiary's value consists of two separate NUBIG
components: (1) the subsidiary stock's BIG/BIL; and (2) the BIG/BIL on the subsidiary's assets.
1374-3 reduces the NUBIG
by $100,000 and creates a new $100,000 NUBIG
with a 10 year period that extends from December 2004, under Sec.
108(b) and 1017 that occurs as a result of excluded COD income realized during the first 12 months following the ownership change is treated as if it occurred immediately before such change, so that a subsequent disposition of such asset may be treated as RBIG (although such basis reduction does not affect NUBIG
is the excess of the FMV of all corporate assets over the basis of such assets, determined as of the first day of S status.
382(h)(6)(A), and, therefore, as RBIG (assuming the threshold NUBIG