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bankruptcy estate succeeds to the NOLs as determined under
section 172, as of the first day of the individual debtor’s
taxable year in which the case commences. Sec. 1398(g)(1). The
NOLs as determined by a calendar year individual debtor, as of
January 1 of the year the debtor files a bankruptcy petition, go
to the bankruptcy estate for its exclusive use for the benefit of
the creditors on the commencement date. Id. The individual
debtor then succeeds to and takes into account the NOLs of the
bankruptcy estate at the termination of the bankruptcy case.
Sec. 1398(i). This includes both the remaining NOLs that the
bankruptcy estate succeeded to under section 1398(g) and the
unused tax attributes accumulated by the operation of the
bankruptcy estate. Id.2 The years in which the debtor may use
2 Specifically, subsecs.(g) and (i) of sec. 1398 provide:
SEC. 1398(g). Estate Succeeds to Tax Attributes
of Debtor.--The estate shall succeed to and take into
account the following items (determined as of the first
day of the debtor’s taxable year in which the case
commences) of the debtor–-
(1) Net operating loss carryovers.–-The net
operating loss carryovers determined under section
172.
* * * * * * *
(i) Debtor succeeds to tax attributes of
estate.–-In the case of a termination of an estate, the
debtor shall succeed to and take into account the items
referred to in paragraphs (1), (2), (3), (4), (5) and
(6) of subsection (g) in a manner similar to that
provided in such paragraphs (but taking into account
(continued...)
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Last modified: May 25, 2011