Jun 20, 2016
From KPMG TaxWatch
The South Carolina Department of Revenue recently issued a comprehensive draft revenue ruling addressing how the IRC section 382 limitations on the use of NOL carryforwards following a change in ownership apply for South Carolina corporate income tax purposes. Specifically, the draft ruling clarifies that if a corporation is doing business in South Carolina and other states, the section 382 limitation must be apportioned using the apportionment factor for the taxable year that the ownership year change occurs. In addition, the draft ruling provides guidance for determining whether a corporation has South Carolina “net unrealized built in gain or NUBIG” or “net unrealized built in loss or NUBIL” so that the section 382 limitation must be adjusted. The ruling also (1) addresses how the 382 limitations apply if the taxpayer files a permissive South Carolina consolidated return and (2) clarifies that South Carolina does not adopt the federal separate return limitation years or “SRLY” rules that apply for federal purposes to the use of losses in a consolidated group. Per the draft ruling, the effective date is of the guidance is all periods open under the statute of limitations. The Department will be accepting comments on the draft through June 28, 2016. Please contact Jeana Parker at 919-664-7143 with questions.
For more information about TWIST or to view archived episodes, please visit our TWIST homepage.
To receive TWIST e-mails each Monday morning, make sure that state, local and indirect is checked off as one of your topics of interest on the KPMG TaxWatch registration site.
The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.
The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.