Regulations under Section 382(h) Related to Built-In Gain and Loss; Withdrawal

Key Points

• 1The rule addresses Section 382 of the tax code, which limits tax benefits when a company's ownership significantly changes (such as through a merger or major stock purchase)
• 2It focuses on 'built-in gains and losses' — the difference between what a company's assets are actually worth versus what they paid for them, which can be hidden from tax calculations
• 3The IRS is withdrawing a previous 2019 proposal and replacing it with new guidance to clarify how companies should calculate these hidden gains and losses
• 4The regulation primarily affects large corporations, investment firms, and businesses involved in mergers and acquisitions that experience substantial ownership shifts
• 5Companies will need to follow new or updated rules when filing taxes after this regulation becomes final, potentially affecting how much tax they owe

Key Dates