IRS Unveils Major Guidance on Ownership Changes Under Section 382, Wins Praise

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The IRS unveiled major guidance on ownership changes under Section 382 that practitioners said represented significant simplification and could lead to fewer changes that would trigger limitations on the use of losses in reorganizations. In Notice 2010-49, the IRS set out two potential new approaches for the application of Section 382 for small shareholders, including the application of the aggregation and segregation rules to public groups. In Notice 2010-50, IRS provided guidance on how to address fluctuations in stock value in determining owner shifts of loss corporations that have more than one class of stock outstanding.