Contradict   I believe the following two paragraphs contradict each other  Im not sure which one is right   Additionally many shell companies carry forward what is known as a taxloss This means that a loss incurred in previous years can be applied to income in future years This shelters future income from income taxes Since most active public companies become dormant public companies after a string of losses or at least one large one it is more likely that a shell company will offer this tax shelter  It is highly unusual to preserve any benefit from the tax loss carry forward in a shell company The tsx regs normally reduce the loss carry forward by the percentage of the change in control In a well structured reverse merger the private company should end up with  or more of the stock after the mergr thus reducing the tax loss carry forward by this amount for greater   Normally US tax law dramatically reduces the available of a loss carryforward if a change in control has occurred  I believe that when a ownership changeas defined in IRC Section g is deemed to have occurred Section  of the Internal Revenue Code reduces the availability of a loss carryforward to an amount equal to the product of the value of the old loss corporation and the applicable federal longterm taxexempt rate   Thats not true  You can apply tax losses to different items on the balance sheet  Tax loss carryforward is one of the great benefits of a RTO   In this case the contradiction remains because the article is saying that it is highly unusual to preserve the tax benefit Can anyone clarify this point