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The term "specified liability loss" (hereinafter SLL) is defined
in section 172(f)2, which states in part:
SEC. 172(f). Rules Relating to Specified Liability
Loss.-- For purposes of this section--
(1) In General.--The term "specified
liability loss" means the sum of the following
amounts to the extent taken into account in
computing the net operating loss for the taxable year:
* * * * * * *
(B) Any amount (not described in
subparagraph (A)) allowable as a
deduction under this chapter with
respect to a liability which arises
under a Federal or State law or out of
any tort of the taxpayer if--
(i) in the case of a liability
arising out of a Federal or State
law, the act (or failure to act)
giving rise to such liability
occurs at least 3 years before the
beginning of the taxable year
* * * * * * *
A liability shall not be taken into account under
subparagraph (B) unless the taxpayer used an
accrual method of accounting throughout the period or
periods during which the acts or failures to act
giving rise to such liability occurred.
(2) Limitation.--The amount of the specified
liability loss for any taxable year shall not exceed
2 The Omnibus Budget Reconciliation Act of 1990 (OBRA 1990),
Pub. L. 101-508, sec. 11811(b), 104 Stat. 1388-532, combined
former secs. 172(j) (relating to product liability losses) and
172(k) (relating to deferred statutory or tort liability losses)
redesignating them sec. 172(f), effective for NOL's for taxable
years beginning after Dec. 31, 1990, OBRA 1990, sec. 11811(c),
104 Stat. 1388-534.
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Last modified: May 25, 2011