Research by Auerbach and Poterba and by Altshuler and Auerbach on tax loss carry forwards indicate that the following tax-related factor may offset the otherwise full value of the target's losses:

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Tax loss carry forwards have an expiration period, usually ranging from 5-20 years, after which they cannot be used to offset taxable income. This means that if the target company's tax loss carry forwards are close to expiration, they may not provide much value to the acquirer.