Section 29 Liquidation of a Subsidiary

• Library: Business Transitions 2009 Supp

The consolidated loss disallowance rules were substantially revised in Treasury Decision 9424, 2008-44 I.R.B. 1012 (adopted Sept. 9, 2008; corrected Oct. 20, 2008), finalizing Treasury Regulation § 1.1502-36, setting forth rules for the utilization of unified losses (unified loss rules). These rules prevent:

• the consolidated return provisions from reducing a group’s consolidated taxable income through the creation and recognition of non-economic losses on a subsidiary’s stock; and

• the members of the...