nine te..X Connect New tab Calcufator Heart Corporation has net assets valued at

Question

nine te..X Connect New tab Calcufator Heart Corporation has net assets valued at $1 milion and an NOL of $250,000. On December 31 of last year taxpayer, in a restructuring qualifying as a tax free reorganization. Heart shareholders receive 45% or firain's shares inex Assuming that the Federal long term tax-exemot rato l' S% ant etsin's discount aa or is 10%, what is te maximum imam thet Brtaan.se armam this year? year, Heart is acquired by Brain Corporation, a calendar change for all or the Heart teck. a. $250,000 b. $100,000 $12,500 Od. $50,000 e None of these choices are correct

Explanation / Answer

Ans: D

Explanation:

Since there has been more than a 50% point ownership change, the § 382 limitation applies. The maximum amount of NOL that can be utilized in any one year is $50,000 ($1 million × 5%).

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