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TITLE 26-INTERNAL REVENUE CODE (A) the percent of the fair market value of the outstanding stock of the acquiring corporation owned (immediately after the reorganization) by the stockholders (imme- diately before the reorganization) of the loss corporation, as the result of owning stock of the loss corporation, multiplied by (B) five. (3) Exception to limitation In this subsection The limitation in this subsection shall not apply if the transferor corporation and the acquiring corporation are owned substantially by the same persons in the same proportion. (4) Net operating loss carryovers to subsequent years In computing the net operating loss car- ryovers to taxable years subsequent to a taxble year in which there was a limitation applicable to a net operating loss carryover by operation of this subsection, the income in such taxable year, as computed under section 172(b)(2), shall be increased by the amount of the reduction of the total net operating loss carryover determined under paragraph (2). (5) Attribution of ownership If the transferor corporation or the acquir- ing corporation owns (immediatley before the reorganization) any of the outstanding stock of the loss corporation, such transferor corpo- ration or acquiring corporation shall, for pur- poses of this subsection, be treated as owning (immediately after the reorganization) a per- centage of the fair market value of the ac- quiring corporation's outstanding stock which bears the same ratio to the percentage of the fair market value of the outstanding stock of the loss corporation (immediately before the reorganization) owned by such transferor cor- poration or acquiring corporation as the fair market value of the total outstanding stock of the loss corporation (immediately before the reorganization) bears to the fair market value of the total outstanding stock of the acquir- ing corporation (immediately after the reor- ganization). (6) Stock of corporation controlling acquiring cor- poration If the stockholders of the loss corporation (immediately before the reorganization) own, as a result of the reorganization, stock in a corporation controlling the acquiring corpora- tion, such stock of the controlling corporation shall, for purposes of this subsection, be treated as stock of the acquiring corporation in an amount valued at an equivalent fair market value. (c) Definition of stock For purposes of this section, "stock" means all shares except nonvoting stock which is limited and preferred as to dividends. (Aug. 16, 1954, ch. 736, 68A Stat. 129; Aug. 31, 1964, Pub. L. 88-554, § 4(b)(3), 78 Stat. 763.) TAXABLE YEARS BEGINNING AFTER JUNE 30, 1978, AND REORGANIZATIONS PURSUANT TO PLANS OF REORGANIZATION ADOPTED ON OR AFTER JANU- ARY 1, 1978 Pub. L. 94-455, title VIII, § 806(e), (g)(2), (3), Oct. 4, 1976, 90 Slat. 1599, 1605, 1606, provided that, for purposes of applying subsec. (a) of this section to taxable years beginning after June 30, 1978, with specified exceptions, and that for purposes of apply- ing subsec. (b) of this section to reorganiza- tions pursuant to plans of reorganization adopted on or after Jan. 1, 1978, this section will read as follows: § 382. Special limitations on net operating loss car- ryover (a) Certain acquisitions of stock of a corporation (1) In general If- (A) on the last day of a taxable year of a corporation, (B) any one or more of the persons de- scribed in paragraph (4)(B) own, directly or indirectly, a percentage of the total fair market value of the participating stock or of all the stock of the corporation which ex- ceeds by more than 60 percentage points the percentage of such stock owned by such person or persons at- (i) the beginning of such taxable year, or (ii) the beginning of the first or second preceding taxable year, and (C) such increase in percentage points is attributable to- (i) a purchase by such person or persons of such stock, or of the stock of another corporation owning stock in such corpo- ration, or of an interest in a partnership or trust owning stock in such corporation, (ii) an acquistion (by contribution, merger, or consolidation) of an interest in a partnership owning stock in such corpo- ration, or an acquisition (by contribution, merger, or consolidation) by a partnership of such stock, (iii) an exchange to which section 351 (relating to transfer to corporation con- trolled by transferor) applies, or an acqui- sition by a corporation of such stock in an exchange in which section 351 applies to the tranferor, (iv) a contribution to the capital of such corporation, (v) a decrease in the amount of such stock outstanding or in the amount of stock outstanding of another corporation owning stock in such corporation (except a decrease resulting from a redemption to pay death taxes to which section 303 ap- plies), (vi) a liquidation of the interest of a partner in a partnership owning stock in such corporation, or (vii) any combination of the transac- tions described in clauses (i) through (vi), then the net operating loss carryover, if any, from such taxable year and the net operating loss carryovers, if any, from prior taxable years to such taxable year and subsequent tax- able years of such corporation shall be re- duced by the percentage determined under paragraph (2), (2) Reduction of net operating loss carryover The reduction applicable under paragraph (1) shall be the sum of the percentages deter- mined by multiplying- § 382 Page 280