The tax loss carryforward benefits can be used in mergers but cannot be used in the formation of holding companies.

Question

Quizplus · Accepted Answer

Tax loss carryforward benefits can be used in mergers because the acquiring company can inherit the tax losses of the acquired company. However, they cannot be used in the formation of holding companies because the holding company is a separate legal entity from its subsidiaries and does not inherit their tax losses.

The Tax Loss Carryforward Benefits Can Be Used in Mergers