Two New Section 382 Rulings for Measuring Changes in 5-Percent Owners and Treatment of Prepaid Income
Author: James D. Goeller.
Source: Volume 24, Number 01, September/October 2010 , pp.52-56(5)
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Abstract:
In Notice 2010-50 , 4 the IRS says it will accept a taxpayer’s reasonable attempt to measure increases in ownership where there are multiple classes of stock, and there is a potential for relative fluctuations in value to exist. The IRS will not challenge any reasonable application of either a Full Value Methodology or the Hold Constant Principle (HCP)—including certain HCP alternative methodologies—as long as a single methodology is applied consistently.Keywords: Section 382, Notice 2010-50, Treas. Reg. Sec. 1.382-7, ownership change, 5 percent owner, full value methodology, hold constant principle
Affiliations:
1: Perry-Smith LLP.