Final Sec. 382 Regs. on Distributions from Qualified Trusts

While Section 382 is extremely complicated, there has been a level of certitude for practitioners that, if all the provisions applicable to a Section 382 analysis are properly taken into account, a taxpayer should know its cumulative ownership shift when determining whether it has experienced an "ownership change" under Section 382(g). Section 382 limits a corporation's ability to use its net operating losses and other attributes after an ownership change. On Jun 28, 2006, TD 9269 was released, finalizing regulations under Regs. Section 1.382-10, which provides special rules on distributions from qualified trusts. The general rule under Section 382(1)(3) is that, when determining stock ownership for Section 382 purposes, the Section 318 constructive ownership rules apply. Regs. Section 1.382-10(a)(1) applies to distributions from qualified trust under Section 401(a). The final regulations adopt the temporary regulations with no substantive changes.