RMIL - The Swaysayers Message Board

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Microcap & Penny Stocks : RMIL - The Swaysayers

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To: Joe Master who wrote (70)	10/31/1997 1:55:00 PM
From: lavalamp	Read Replies (1) of 95

limitation on use of carryforwards: after an ownership change, the amount of income that a corporation may offset each year by preacquisiton net operating loss carryforwards is generally limited to an amount determined by multiplying the value of the equity of the corporation just prior to the ownership change by the federal long-term tax exempt rate in effect on the date of the change. any unused limitation may be carried forward and added to the next years limitation (assuming the nol has not yet expired). 2 kinds of ownership changes can trigger the income limitation : (1) a change involving a 5% shareholder (2) any tax free reorganization other than a D or a F reorg. One or more of the 5 % shareholders must have increased their % ownership in the corporation by more than 50 % over their lowest pre-change ownership %. Thus, at least one of the shareholders of Rocky Mountain will become a 5% shareholder in RMIL, thus triggering the change of ownership rules for limiting the net operating loss. Seriously, talk with your tax people and give them all the facts. They will shoot straight with you.

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