Excess credits
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.
Excess credit
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.
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.
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.
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.
Pub. L. 92–178, title III, § 302(a)85 Stat. 521Pub. L. 94–455, title VIII, § 806(f)(2)90 Stat. 1605Pub. L. 95–30, title II, § 202(d)(3)(B)91 Stat. 148Pub. L. 96–222, title I, § 103(a)(6)(G)(xiii)94 Stat. 211Pub. L. 96–223, title II, § 232(b)(2)(C)94 Stat. 276Pub. L. 97–34, title II, § 221(b)(1)(C)95 Stat. 246Pub. L. 98–369, div. A, title IV, § 474(r)(12)(A)98 Stat. 841Pub. L. 99–514, title VI, § 621(b)100 Stat. 2265(Added , , ; amended , title X, § 1031(b)(5), title XIX, § 1906(b)(13)(A), , , 1623, 1834; , (C), , ; , , ; , (D), , ; , (D), title III, § 331(d)(1)(C), (D), , , 294; , (B), , ; , (e)(1), , , 2266.)
Editorial Notes
Amendments
Pub. L. 99–514, § 621(b)1986—, amended section generally. Prior to amendment, section read as follows: “If—
“(1) the ownership and business of a corporation are changed in the manner described in section 382(a)(1), or
“(2) in the case of a reorganization specified in paragraph (2) of section 381(a), there is a change in ownership described in section 382(b)(1)(B),
then the limitations provided in section 382 in such cases with respect to the carryover of net operating losses shall apply in the same manner, as provided under regulations prescribed by the Secretary, with respect to any unused business credit of the corporation which can otherwise be carried forward under section 39, to any unused credit of the corporation which could otherwise be carried forward under section 30(g)(2), to any excess foreign taxes of the corporation which could otherwise be carried forward under section 904(c), and to any net capital loss of the corporation which can otherwise be carried forward under section 1212.”
Pub. L. 99–514, § 621(e)(1)Pub. L. 94–455, § 806(f)(2), repealed amendment by . See 1976 Amendment note below.
Pub. L. 98–369, § 474(r)(12)(A)(ii)Pub. L. 94–455, § 806(f)(2)section 382(a) of this title1984—, in catchline of section 383, as in effect prior to amendment by , as related to , substituted “Special limitations on unused business credits, research credits, foreign taxes, and capital losses” for “Special limitations on carryovers of unused investment credits, work incentive program credits, new employee credits, alcohol fuel credits, research credits, employee stock ownership credits, foreign taxes, and capital losses”.
Pub. L. 98–369, § 474(r)(12)(B)(ii)Pub. L. 94–455, § 806(f)(2)section 382(b) of this title, in catchline of section 383, as amended by , as related to , substituted “business credits, research credits” for “investment credits, work incentive program credits”.
Pub. L. 98–369, § 474(r)(12)(B)(ii)Pub. L. 94–455, § 806(f)(2)section 382(a) of this title, in catchline of section 383, as amended by , as related to , substituted “business credits” for “investment credits” and struck out references to work incentive program credits, new employee credits, alcohol fuel credits, and employee stock ownership credits.
Pub. L. 98–369, § 474(r)(12)(A)(i)Pub. L. 94–455, § 806(f)(2)section 382(a) of this title, in section 383, as in effect prior to amendment by , as related to , substituted “with respect to any unused business credit of the corporation which can otherwise be carried forward under section 39, to any unused credit of the corporation which could otherwise be carried forward under section 30(g)(2), to any excess foreign taxes of the corporation which could otherwise be carried forward under section 904(c), and to any net capital loss of the corporation which can otherwise be carried forward under section 1212” for “with respect to any unused investment credit of the corporation which can otherwise be carried forward under section 46(b), to any unused work incentive program credit of the corporation which can otherwise be carried forward under section 50A(b), to any unused new employee credit of the corporation which could otherwise be carried forward under section 53(b), to any unused credit of the corporation which could otherwise be carried forward under section 44E(e)(2), to any unused credit of the corporation which could otherwise be carried forward under section 44F(g)(2), to any unused credit of the corporation which could otherwise be carried forward under section 44G(b)(2), to any excess foreign taxes of the corporation which can otherwise be carried forward under section 904(c), and to any net capital loss of the corporation which can otherwise be carried forward under section 1212”.
Pub. L. 98–369, § 474(r)(12)(B)(i)Pub. L. 94–455, § 806(f)(2)section 382(b) of this title, in section 383, as amended by , as related to , substituted “with respect to any unused business credit of the corporation under section 39, to any unused credit of the corporation under section 30(g)(2), to any excess foreign taxes of the corporation under section 904(c), and to any net capital loss of the corporation under section 1212” for “with respect to any unused investment credit of the corporation under section 46(b), to any unused work incentive program credit of the corporation under section 50A(b), to any excess foreign taxes of the corporation under section 904(c), and to any net capital loss of the corporation under section 1212”.
Pub. L. 98–369, § 474(r)(12)(B)(i)Pub. L. 94–455, § 806(f)(2)section 382(a) of this title, in section 383, as amended by , as related to , substituted “with respect to any unused business credit of the corporation under section 39, to any unused credit of the corporation under section 30(g)(2), to any excess foreign taxes of the corporation under section 904(c), and to any net capital loss of the corporation under section 1212” for “with respect to any unused investment credit of the corporation under section 46(b), to any unused work incentive program credit of the corporation under section 50A(b), to any unused new employee credit of the corporation under section 53(b), to any unused credit of the corporation under section 44E(e)(2), to any unused credit of the corporation under section 44F(g)(2), to any unused credit of the corporation under section 44G(b)(2), to any excess foreign taxes of the corporation under section 904(c), and to any net capital loss of the corporation under section 1212”.
Pub. L. 97–34, § 331(d)(1)(C)(ii)section 382(a) of this titlePub. L. 94–455, § 806(f)(2)1981—, (D)(ii), in catchlines of sections 383, as related to , before and after amendment by , inserted reference to employee stock ownership credits.
Pub. L. 97–34, § 331(d)(1)(D)(i)Pub. L. 94–455, § 806(f)(2)section 382(a) of this title, in section 383, as in effect prior to amendment by , as related to , inserted “to any unused credit of the corporation which could otherwise be carried forward under section 44G(b)(2),”.
Pub. L. 97–34, § 331(d)(1)(C)(i)Pub. L. 94–455, § 806(f)(2)section 382(a) of this title, in section 383, as amended by , as related to , inserted “to any unused credit of the corporation under section 44G(b)(2),”.
Pub. L. 97–34, § 221(b)(1)(C)(ii)section 382(a) of this titlePub. L. 94–455, § 806(f)(2), (D)(ii), in catchlines of sections 383, as related to , before and after amendment by , inserted reference to research credits.
Pub. L. 97–34, § 221(b)(1)(D)(i)Pub. L. 94–455, § 806(f)(2)section 382(a) of this title, in section 383, as in effect prior to amendment by , as related to , inserted “to any unused credit of the corporation which could otherwise be carried forward under section 44F(g)(2),” after “section 44E(e)(2),”.
Pub. L. 97–34, § 221(b)(1)(C)(i)Pub. L. 94–455, § 806(f)(2)section 382(a) of this title, in section 383, as amended by , as related to , inserted “to any unused credit of the corporation under section 44F(g)(2),” after “section 44E(e)(2),”.
Pub. L. 96–223, § 232(b)(2)(D)Pub. L. 94–455, § 806(f)(2)section 382(a) of this title1980—, in section 383, as in effect prior to amendment by , as related to , inserted reference to unused alcohol fuel credits in section catchline and reference to any unused credit of the corporation which could otherwise be carried forward under section 44E(e)(2) in text.
Pub. L. 96–223, § 232(b)(2)(C)Pub. L. 94–455, § 806(f)(2)section 382(a) of this title, in section 383, as amended by , as related to , inserted reference to unused alcohol fuel credits in section catchline and reference to any unused credit of the corporation under section 44E(e)(2) in text.
Pub. L. 96–222section 382(a) of this titlePub. L. 94–455, § 806(f)(2), in sections 383, as related to , before and after amendment by , substituted “section 53(b)” for “section 53(c)”.
Pub. L. 95–30, § 202(d)(3)(C)Pub. L. 94–455, § 806(f)(2)section 382(a) of this title1977—, in section 383, as in effect prior to amendment by , as related to , inserted “to any unused new employee credit of the corporation which could otherwise be carried forward under section 53(c)” in text and “new employee credits,” in catchline.
Pub. L. 95–30, § 202(d)(3)(B)Pub. L. 94–455, § 806(f)(2)section 382(a) of this title, in section 383, as amended by , as related to , inserted “to any unused new employee credit of the corporation under section 53(c)” in text and “new employee credits,” in section catchline.
Pub. L. 94–4551976—, §§ 1031(b)(5), 1906(b)(13)(A), struck out “or his delegate” after “Secretary”, and substituted “section 904(c)” for “section 904(d)”, respectively, in section 383 set out first.
Pub. L. 94–455, § 806(f)(2)Pub. L. 99–514, § 621(e)(1), which substituted, in sections 383 as related to section 382(a) and (b) of this title, provisions that the net operating loss limitations in section 382 shall apply to unused investment credits under section 46(b), to unused work incentive program credits under section 50A(b), to excess foreign taxes under section 904(d) and to net capital losses under section 1212 for provisions that the net operating loss carryover limitations in section 382 shall apply, in the case of ownership changes described in section 382(a)(1) or reorganizations specified in section 381(a)(2) resulting in ownership changes described in section 382(b)(1)(B), to unused investment credits under section 46(b), to unused work incentive program credits under section 50A(B), to excess foreign taxes under section 904(c), and to net capital losses under section 1212, was repealed by . See Effective Date of 1986 and 1976 Amendment notes below.
Statutory Notes and Related Subsidiaries
Effective Date of 1986 Amendment
section 621(b) of Pub. L. 99–514section 621(f) of Pub. L. 99–514section 382 of this titleAmendment by applicable to any ownership change after , except as otherwise provided, see , as amended, set out as a note under .
section 806(f)(1) of Pub. L. 94–455section 621(f)(2) of Pub. L. 99–514section 382 of this titleRepeal of amendment by effective , with certain exceptions, see , set out as a note under .
Effective Date of 1984 Amendment
Pub. L. 98–369section 475(a) of Pub. L. 98–369section 21 of this titleAmendment by applicable to taxable years beginning after , and to carrybacks from such years, see , set out as a note under .
Effective Date of 1981 Amendment
Pub. L. 97–34section 221(d) of Pub. L. 97–34section 41 of this titleAmendment by section 221(b)(1)(C), (D) of applicable to amounts paid or incurred after , see , as amended, set out as an Effective Date note under .
Pub. L. 97–34section 339 of Pub. L. 97–34section 401 of this titleAmendment by section 331(d)(1)(C), (D) of applicable to taxable years beginning after , see , set out as a note under .
Effective Date of 1980 Amendments
Pub. L. 96–223section 232(h)(1) of Pub. L. 96–223section 40 of this titleAmendment by applicable to sales or uses after , in taxable years ending after such date, see , set out as an Effective Date note under .
Pub. L. 96–222Pub. L. 95–60092 Stat. 2763section 201 of Pub. L. 96–222section 32 of this titleAmendment by effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978, , , , to which such amendment relates, see , set out as a note under .
Effective Date of 1976 Amendment
section 1031(b)(5) of Pub. L. 94–455section 1031(c) of Pub. L. 94–455section 904 of this titleFor effective date of amendment by , see , set out as a note under .
section 382(a) of this titlePub. L. 94–455Pub. L. 94–455section 382(a)(1)(B)(ii) of this titlesection 382(b) of this titlePub. L. 94–455Pub. L. 94–455section 382 of this titleFor purposes of applying this section (as it relates to ) as amended by section 806(e), (f) of , the amendments made by section 806(e), (f) of effective for taxable years beginning after , with specified provisions for determining the beginning of the taxable years specified in , and this section (as it relates to ) as amended by section 806(e), (f) of to apply (and such sections as in effect prior to such amendment not to apply) to reorganizations pursuant to a plan of reorganization adopted by one or more of the parties thereto on or after , see section 806(g)(2), (3) of , as amended, formerly set out as a note under .
Effective Date
Pub. L. 92–178, title III, § 302(c)85 Stat. 521
Delay in Effective Date of 1976 Amendment
section 368 of Pub. L. 95–600section 382 of this titleFor election by taxpayer for application of prior law with respect to any acquisition or reorganization occurring before the end of the taxpayer’s first taxable year beginning after , see , set out as a Delay in Effective Date of 1976 Amendment note under .