What is Rose net operating loss deduction

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Question - Rose Inc. is an accrual-basis, calendar-year corporation with only voting common stock outstanding. On October 19, 2018, acquired the assets of Nagg Inc. by issuing 3,000 of its voting common shares in a type A reorganization. Nagg has a $300,000 net operating loss carryover and the value of its stock is $2 million. Rose's taxable income for the year of acquisition is $280,000. Assume the long-term tax-exempt rate 3 percent.

Required -

a. What is Rose's net operating loss deduction for the year of acquisition assuming that the Sec. 382 limitation does not apply? For the following year?

b. What is Rose's net operating loss deduction for the year of acquisition if the Sec. 382 limitation does apply to the acquisition? For the following year?

Reference no: EM132663941

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