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Strategies & Market Trends : Value Investing

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To: jeffbas who wrote (13682)	1/14/2002 2:39:38 AM
From: Bob Rudd	Read Replies (2) of 78958

Jeffrey: Thanks for NOL info. I dug thru about a dozen texts before coming across a decent explanation of this...which pretty much confirms what you've so well stated here. Basically a change in ownership and a change in business kills the NOL. A change in ownership while maintaining the lines of business produces the limitation of taking the loss in annual increments limited by the tax exempt bond rate and equity value before the change. There are other limitations and constraints - it's a real bag of snakes. As to structuring this as a deal where the company that has the loss buys a profitable business as blankmind creatively suggested, I suspect there are provisions that limit this...it's pretty apparent that a lot of folks have spent sleepless nights making it difficult for a NOL to survive an ownership change intact. Thanks again for NOL insight. I have no SOFN, but this signficantly alters value and margin of safety in other situations compared to what I had previously assumed.

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