Professor Eustice opens the discussion with a description of the 1976 amendments to section 382 and the history of other provisions as a backdrop to the proposed changes by the Senate Finance Committee Staff Report. Professor Eustice provides a comprehensive roadmap to the limitations proposed, including how they would operate in practice. Mr. Portney then considers the reform proposals for the net operating loss carryover and the types of considerations that merit discussion in choosing the appropriate restrictions on carryovers. Mr. Portney presents a strong case in favor of simplicity. He argues also that the statute should restrict the use of corporate acquisitions for the purpose of obtaining loss carryovers and suggests methods for accomplishing that sort of restriction. Professor Eustice then discusses alternatives for limiting loss carryovers, one based on the purchase price of the business and the other based on the future income stream from the pool of capital in existence at the time of the acquisition.
James S. Eustice & Gerald G. Portney,
The Destiny of Net Operating Losses,
San Diego L. Rev.
Available at: https://digital.sandiego.edu/sdlr/vol22/iss1/5