KPMG PPT - Tax Executives Institute, Inc.

Unified Loss Rules
Basis Reduction Rule
►
►
►
Amount of the basis reduction is the lesser of:
► The share’s “net positive adjustment” and
► The “disconformity amount.”
Net positive adjustment is the greater of:
► Zero and
► The sum of the stock basis adjustments, other than reductions for
distributions, reflected in the basis of the transferred share.
Disconformity amount is the excess, if any, of
► The basis in the transferred share over
► The share’s allocable portion of the subsidiary’s net inside attribute
amount.
► Net inside attribute amount is generally the sum of the subsidiary’s NOLs and capital loss
carryovers, deferred deductions, money, and basis in assets other than money, reduced by the
amount of the subsidiary’s liabilities.
©2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
34