When the § 382 limitation is evoked, the acquiring corporation is limited in its use of the tax loss carryover of the loss corporation. The limitation is based on the net present value of the loss corporation using the Federal long-term discount rate.

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The § 382 limitation is based on the value of the loss corporation's stock immediately before the ownership change multiplied by the long-term tax-exempt rate, not the net present value of the loss corporation using the Federal long-term discount rate.

When the § 382 Limitation Is Evoked, the Acquiring Corporation