IRS Unveils Rules Limiting Taxpayers' Ability to Duplicate Built-In Losses

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The Internal Revenue Service Aug. 30 released final rules (T.D. 9633) limiting the ability of taxpayers to duplicate net built-in losses under tax code Section 362(e)(2).
Enacted under the American Jobs Creation Act in 2004, the code section is aimed at preventing taxpayers from importing net built-in losses into the U.S. tax system or duplicating the losses within the United States.
The IRS said the regulations apply to certain tax-free transfers of loss property to corporations and affect all parties to the transaction. Proposed rules (REG-110405-05) on the issue were released in October 2006.
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