Oren L. Benton - Page 31

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          under title 11, U.S.C.                                                      
               Under section 1398(g), the estate succeeds to certain of the           
          debtor’s income tax attributes, including the debtor’s NOL                  
          carryovers (under section 172) and capital loss carryovers (under           
          section 1212) from tax periods prior to the commencement of the             
          bankruptcy.  Sec. 1398(g)(1), (5).  In a like manner, to the                
          extent the estate has not used those same tax attributes, the               
          debtor succeeds to them at the termination of the estate.  Sec.             
          1398(i).  Accordingly, upon the commencement of a bankruptcy, the           
          estate becomes a taxpayer with respect to the debtor’s property             
          in the bankruptcy proceeding.  Upon termination of the estate,              
          the estate’s status as a separate parallel taxpayer ends and its            
          unused tax attributes transfer to the debtor.  Id.                          
               Although a debtor may succeed to the estate’s NOLs at the              
          termination of the estate, section 1398(j)(2)(B) places certain             
          limitations on a debtor’s ability to use NOLs.  Section                     
          1398(j)(2)(B) provides the following rules with respect to net              
          operating losses:  “The debtor may not carry back to a taxable              
          year before the debtor’s taxable year in which the [bankruptcy]             
          case commences any carryback from a taxable year ending after the           
          case commences.”  This section expressly prohibits a debtor from            
          carrying back the estate’s or the debtor’s postcommencement                 

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Last modified: May 25, 2011