IRS Offers Relief in Built-In Gain and Loss Rules

The IRS will provide transition relief to companies that have a cap on the amount of losses they’ve acquired through a merger.

The Internal Revenue Service issued a notice of proposed rules [REG-125710-18] to revise the applicability date of previously issued rules that limit the amount of the losses held by the target company in an acquisition that can be used to offset future taxes after the transaction takes place.

• The proposal relates to Section 382(h) of the 2017 tax law that tells companies how to calculate net and recognized gains and losses—which impact total net operating ...