#### § 1.382-1 Table of contents.

This section lists the captions that appear in the regulations for §§ 1.382-2 through 1.382-12.

## § 1.382-2 General rules for ownership change.

(a) Certain definitions for purposes of sections 382 and 383 and the regulations thereunder.

(1) Loss corporation.

(i) In general.

(ii) Distributor of transferor loss corporation in a transaction under section 381.

(iii) Separate accounting required for losses and credits of an acquiring corporation and a distributor or transferor loss corporation.

(iv) End of separate accounting for losses and credits of distributor or transferor corporation.

(v) Application to other successor corporations.

(vi) Any section 382 disallowed business interest carryforward.

(2) Pre-change loss.

(3) Stock.

(i) In general.

(ii) Convertible stock.

(4) Testing date.

(i) In general.

(ii) Exceptions.

(5) Successor corporation.

(6) Predecessor corporation.

(7) Section 382 disallowed business interest carryforward.

(8) Testing period.

(b) Effective dates.

(1) In general. [Reserved]

(2) Rules provided in paragraph (a)(3)(ii) of this section.

(i) In general.

(ii) Certain convertible preferred stock.

(3) Rules provided in paragraphs (a)(1)(i)(A), (a)(1)(ii), (iv), and (v), (a)(2)(iv) through (vi), (a)(3)(i), and (a)(4) through (8) of this section.

## § 1.382-3 Definitions and rules relating to a 5-percent shareholder.

(a) Definitions.

(1) Entity.

(i) In general.

(ii) Examples.

(iii) Effective date.

(A) In general

(B) Special rule.

(C) Example.

(2) [Reserved]

(b)-(i) [Reserved]

(j) Modification of the segregation rules of § 1.382-2T(j)(2)(iii) in the case of certain issuances of stock.

(1) Introduction.

(2) Small issuance exception.

(i) In general.

(ii) Small issuance defined.

(iii) Small issuance limitation.

(A) In general.

(B) Class of stock defined.

(C) Adjustments for stock splits and similar transactions.

(D) Exception.

(iv) Short taxable years.

(3) Other issuances of stock for cash.

(i) In general.

(ii) Solely for cash.

(A) In general.

(B) Related issuances.

(iii) Coordination with paragraph (j)(2) of this section.

(4) Limitation on exempted stock.

(5) Proportionate acquisition of exempted stock.

(i) In general.

(ii) Actual knowledge of greater overlapping ownership.

(6) Exception for equity structure shifts.

(7) Transitory ownership by underwriter disregarded.

(8) Certain related issuances.

(9) Application to options.

(10) Issuance of stock pursuant to the exercise of certain options.

(11) Application to first tier and higher tier entities.

(12) Certain non-stock ownership interests.

(13) Examples.

(14) Effective date.

(i) In general.

(ii) Effective date for paragraph (j)(10) of this section.

(iii) Election to apply this paragraph (j) retroactively.

(A) Election.

(B) Amended returns.

(C) Revised information statements.

(k) Special rules for certain regulated investment companies.

(1) In general.

(2) Effective date.

(i) General rule.

(ii) Election to apply prospectively.

## § 1.382-4 Constructive ownership of stock.

(a) In general. [Reserved]

(b) Attribution from corporations, partnerships, estates and trusts.

(1) [Reserved]

(2) Limitation.

(c) Attribution to corporations, partnerships, estates and trusts. [Reserved]

(d) Treatment of options as exercised.

(1) General rule.

(2) Options treated as exercised.

(i) Issuance or transfer.

(ii) Subsequent testing dates.

(3) The ownership test.

(4) The control test.

(i) In general.

(ii) Operating rules.

(A) Person and related persons.

(B) Indirect ownership interest.

(5) The income test.

(6) Application of the ownership, control, and income tests.

(i) In general.

(ii) Application of ownership test.

(iii) Application of control test.

(iv) Application of income test.

(7) Safe harbors.

(i) Contracts to acquire stock.

(ii) Escrow, pledge, or other security agreements.

(iii) Compensatory options.

(iv) Options exercisable only upon death, disability, mental incompetency or retirement.

(v) Rights of first refusal.

(vi) Options designated in the Internal Revenue Bulletin.

(8) Additional rules.

(i) Contracts to acquire stock.

(ii) Indirect transfer of an option.

(iii) Options related to interests in non-corporate entities.

(iv) Puts.

(9) Definition of option.

(i) In general.

(ii) Convertible stock.

(iii) Series of options.

(iv) General principles of tax law.

(10) Subsequent treatment of options treated as exercised on a change date.

(i) In general.

(ii) Alternative look-back rule for options exercised within 3 years after change date.

(11) Transfers not subject to deemed exercise.

(12) Certain rules regarding non-stock interests as stock.

(e) Stock transferred under certain agreements. [Reserved]

(f) Family attribution. [Reserved]

(g) Definitions.

(h) Effective date.

(1) In general. [Reserved]

(2) Option attribution rules.

(i) General rule.

(ii) Special rule for control test.

(iii) Convertible stock issued prior to July 20, 1988.

(A) In general.

(B) Exceptions.

(*1*) Nonvoting convertible preferred stock.

(*2*) Other convertible stock.

(iv) Convertible stock issued on or after July 20, 1988, and before November 5, 1992.

(v) Certain options in existence immediately before and after an ownership change.

(vi) Election to apply § 1.382-2T(h)(4).

(A) In general.

(B) Additional consequences of election.

(C) Time and manner of making the election.

(D) Amended returns.

(3) Special rule for options subject to attribution under § 1.382-2T(h)(4).

## § 1.382-5 Section 382 limitation.

(a) Scope.

(b) Computation of value.

(c) Short taxable year.

(d) Successive ownership changes and absorption of a section 382 limitation.

(1) In general.

(2) Recognized built-in gains and losses.

(3) Effective date.

(e) Controlled groups.

(f) Effective date.

## § 1.382-6 Allocation of income and loss to periods before and after the change date for purposes of section 382.

(a) General rule.

(1) In general.

(2) Allocation of business interest expense.

(i) Scope.

(ii) Deductibility of business interest expense.

(b) Closing-of-the-books election.

(1) In general.

(2) Making the closing-of-the-books election.

(i) Time and manner.

(ii) Election irrevocable.

(3) Special rules relating to consolidated and controlled groups.

(i) Consolidated groups.

(ii) Controlled groups.

(4) Allocation of business interest expense.

(i) Scope.

(ii) Deductibility of business interest expense.

(iii) Example.

(c) Operating rules for determining net operating loss, taxable income, net capital loss, modified capital gain net income, and special allocations.

(1) In general.

(2) Adjustment to net operating loss.

(i) Determination of remaining capital gain.

(ii) Reduction of net operating loss by remaining capital gain.

(d) Coordination with rules relating to the allocation of income under § 1.1502-76(b).

(e) Allocation of certain credits.

(f) Examples.

(g) Definitions and nomenclature.

(1) Change year.

(2) Pre-change period.

(3) Post-change period.

(4) Modified capital gain net income.

(h) Applicability date.

(1) In general.

(2) Paragraphs (a) and (b)(1) and (4) of this section.

## § 1.382-7 Built-in gains and losses.

(a) Treatment of prepaid income.

(b) Effective/applicability dates.

(c) [Reserved]

(d) Special rules.

(1)-(4) [Reserved]

(5) Section 382 disallowed business interest carryforwards.

(e)-(f) [Reserved]

(g) Applicability dates.

(1)-(3) [Reserved]

(4) Paragraph (d)(5) of this section.

## § 1.382-8 Controlled groups.

(a) Introduction.

(b) Controlled group loss and controlled group with respect to a controlled group loss.

(1) In general.

(2) Presumption regarding net unrealized built-in loss.

(c) Computation of value.

(1) Reduction in value by the amount restored.

(2) Restoration of value.

(3) Reduction in value by the amount restored.

(4) Appropriate adjustments.

(5) Certain reductions in the value of members of a controlled group.

(d) No double reduction.

(e) Definitions and nomenclature.

(1) Definitions in Section 382 and the regulations thereunder.

(2) Controlled group.

(3) Component member.

(4) Foreign component member.

(i) In general.

(ii) Exception.

(5) Predecessor and successor corporation.

(f) Coordination between consolidated groups and controlled groups.

(g) Examples.

(h) Time and manner of filing election to restore.

(1) Statements required.

(i) Filing by loss corporation.

(ii) Filing by electing member.

(iii) Agreement.

(2) Special rule for foreign component members.

(i) Deemed election to restore full value.

(ii) Election not to restore full value.

(iii) Agreement.

(3) Revocation of election.

(i) [Reserved]

(j) Effective date.

(1) In general.

(2) Transition rule.

(i) In general.

(ii) Special transition rules for controlled groups that had ownership changes before January 29, 1991.

(3) Amended returns.

(4) Effective/applicability date.

## § 1.382-9 Special rules under section 382 for corporations under the jurisdiction of a court in a title 11 or similar case.

(a) Introduction.

(b) Application of section 382(1)(5).

(c) [Reserved]

(d) Rules for determining whether stock of the loss corporation is owned as a result of being a qualified creditor.

(1) Qualified creditor.

(2) General rules for determining whether indebtedness is qualified indebtedness.

(i) Definition.

(ii) Determination of beneficial ownership.

(iii) Duty of inquiry.

(iv) Ordinary course indebtedness.

(3) Treatment of certain indebtedness as continuously owned by the same owner.

(i) In general.

(ii) Operating rules.

(iii) Indebtedness owned by beneficial owner who becomes a 5-percent shareholder or 5-percent entity.

(iv) Example.

(4) Special rule if indebtedness is a large portion of creditor's assets.

(i) In general.

(ii) Applicable period.

(iii) Determination of ownership change.

(iv) Reliance on statement.

(5) Tacking of ownership periods.

(i) Transferee treated as owning indebtedness for period owned by transferor.

(ii) Qualified transfer.

(iii) Exception.

(iv) Debt-for-debt exchanges.

(6) Effective date.

(i) In general.

(ii) Elections and amended returns.

(A) Election to apply this paragraph (d) retroactively.

(B) Election to revoke section 382(l)(5)(H) election.

(C) Amended returns.

(e) Option attribution for purposes of determining stock ownership under section 382(1)(5)(A)(ii).

(1) In general.

(2) Special rules.

(i) Lapse or forfeiture of options deemed exercised.

(ii) Actual exercise of options not deemed exercised.

(iii) Amended returns.

(3) Examples.

(4) Effective dates.

(i) In general.

(ii) Special rule for interest or dividends.

(f)-(h) [Reserved]

(i) Election not to apply section 382(l)(5).

(j) Value of the loss corporation in an ownership change to which section 382(l)(6) applies.

(k) Rules for determining the value of the stock of the loss corporation.

(1) Certain ownership interests treated as stock.

(2) Coordination with section 382(e)(2).

(3) Coordination with section 382(e)(3).

(4) Coordination with section 382(l)(1).

(5) Coordination with section 382(l)(4).

(6) Special rule for stock not subject to the risk of corporate business operations.

(i) In general.

(ii) Coordination of special rule and other rules affecting value.

(7) Limitation on value of stock.

(l) Rules for determining the value of the loss corporation's pre-change assets.

(1) In general.

(2) Coordination with section 382(e)(2).

(3) Coordination with section 382(e)(3).

(4) Coordination with section 382(l)(1).

(5) Coordination with section 382(l)(4).

(m) Continuity of business requirement.

(1) Under section 382(1)(5).

(2) Under section 382(l)(6).

(n) Ownership change in a title 11 or similar case succeeded by another ownership change within two years.

(1) Section 382(l)(5) applies to the first ownership change.

(2) Section 382(l)(6) applies to the first ownership change.

(o) Options not subject to attribution.

(p) Effective date for rules relating to section 382(l)(6).

(1) In general.

(2) Ownership change to which section 382(l)(6) applies occurring before March 17, 1994.

## § 1.382-10 Special rules for determining time and manner of acquisition of an interest in a loss corporation.

## § 1.382-11 Reporting requirements.

(a) Information statement required.

(b) Effective/applicability date.

## § 1.382-12 Determination of adjusted Federal long-term rate.

(a) In general.

(b) Adjusted Federal long-term rate.

(c) Adjustment factor.

(d) Effective/applicability date.

[T.D. 8149, 52 FR 29674, Aug. 11, 1987. Redesignated by T.D. 8440, 57 FR 45711, Oct. 5, 1992]

###### Editorial Note

#### Editorial Note:

For Federal Register citations affecting § 1.382-1, see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *www.govinfo.gov.*