Corus Bankshares Inc. (fka CORSQ)

[hang ten]

this is my last post on this topic.. won't bother the board with this again BUT:

the way the rule is interpreted is everything.. whether 382 refers to

** the number of 5% holders, are there more or less of them? in other words is the ownership change when there are more 5% holders.

or

** whether one of the 5% holders ownership increases by the >50% amount.




ook, just found this:::
Easing of Limitations on Use of Losses Resulting from Changes of Equity Ownership
http://www.dlapiper.com/accelerate_consolidation/

The IRS has also been active in issuing guidance and tax relief that will likely stimulate merger activity and equity raising in the financial industry. In particular, the IRS has relaxed certain rules to allow acquiring companies to benefit from a company’s pre-acquisition net operating losses and certain post-acquisition deductions which economically accrue prior to an acquisition, even after the acquisition.

Under existing tax law, if a corporation experiences a “change in control,” Section 382 of the Internal Revenue Code materially limits the ability of an acquiring company (or the company itself) to benefit from pre-acquisition losses of the acquired company. This limitation is determined by reference to the pre-change value of the equity of the acquired company. One effect of these regulatory actions, combined with the proposed rule change by the Federal Reserve regarding deducting goodwill from tier 1 capital, is to effectively lower the cost of acquisitions for acquiring financial institutions. In addition, certain of the IRS actions eliminate unintended effects that TARP, and in particular equity investments by the US Treasury under TARP, would otherwise have had on the applicable company and on other shareholders of financial institutions that participate in TARP.

Built-in losses from pre-change in control bad debts that are realized within 12 months of a change in control may not be subject to Section 382 limitations. In Notice 2008-83, the IRS announced that any deduction properly allowed after an ownership change to a bank with respect to losses on loans or bad debts (including any deduction for a reasonable addition to a reserve for bad debts) will not be treated as a built-in loss or a deduction that is attributable to periods before the ownership change date, for purposes of Section 382. Without this Notice, these built-in bad debt losses and deductions (to the extent that they are realized within the first 12 months following a “change in control”) would have been treated as losses incurred prior to the ownership change, and the corporation’s ability to benefit from these losses would have been limited under Section 382. This Notice allows these built-in losses to be applied to offset post-ownership change taxable income without the application of Section 382 limitations.