26Title 26The US tax code, read & explained

26 U.S.C. § 383

§ 383. Special limitations on certain excess credits, etc

352 words · amended 8 times · cited by 2 other sections

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No plain-English explainer yet. Below is the official text. Explainers are being added section by section.

The law as written

Current through Public Law 119-102. Amendment notes omitted.

Structure

  1. (a) Excess credits
  2. (b) Limitation on net capital loss
  3. (c) Foreign tax credits
  4. (d) Pro ration rules for year which includes change
  5. (e) Definitions
(a) Excess credits
(1) In general

Under regulations, if an ownership change occurs with respect to a corporation, the amount of any excess credit for any taxable year which may be used in any post-change year shall be limited to an amount determined on the basis of the tax liability which is attributable to so much of the taxable income as does not exceed the section 382 limitation for such post-change year to the extent available after the application of section 382 and subsections (b) and (c) of this section.

(2) Excess credit

For purposes of paragraph (1), the term “excess credit” means—

(A)

any unused general business credit of the corporation under section 39, and

(B)

any unused minimum tax credit of the corporation under section 53.

(b) Limitation on net capital loss

If an ownership change occurs with respect to a corporation, the amount of any net capital loss under section 1212 for any taxable year before the 1st post-change year which may be used in any post-change year shall be limited under regulations which shall be based on the principles applicable under section 382. Such regulations shall provide that any such net capital loss used in a post-change year shall reduce the section 382 limitation which is applied to pre-change losses under section 382 for such year.

(c) Foreign tax credits

If an ownership change occurs with respect to a corporation, the amount of any excess foreign taxes under section 904(c) for any taxable year before the 1st post-change taxable year shall be limited under regulations which shall be consistent with purposes of this section and section 382.

(d) Pro ration rules for year which includes change

For purposes of this section, rules similar to the rules of subsections (b)(3) and (d)(1)(B) of section 382 shall apply.

(e) Definitions

Terms used in this section shall have the same respective meanings as when used in section 382, except that appropriate adjustments shall be made to take into account that the limitations of this section apply to credits and net capital losses.