Owner Shift #2

Owner Shift #2 - Bartlett 1 Megan Bartlett September 28,...

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Bartlett 1 Megan Bartlett September 28, 2011 BLS 442- Dr. Becker Paper #2 Owner Shift In order to understand what an owner shift is, it is important to first understand ownership changes. An ownership change occurs if, during a three-year period, the ownership of stock of the corporation’s “5-percent holders” increases by more than 50 percent, as a result of an owner shift or an equity structure shift (Abrams & Doernberg, 1999). In turn, Section 382 of the Internal Revenue Code limits a corporation’s rights, if an ownership occurs, to use its net operating losses (NOL’s) “each year thereafter to an annual percentage of the fair market value of the corporation at the time of the ownership change” (Ulrich, 2009). There is an owner shift involving 5-percent shareholders, or shareholders who own at least 5 percent of the corporations total stocks, if there is a change in the particular ownership of stock of a corporation and if this change results in a change in the percentage ownership of a 5-percent shareholder. Just to make sure that everything is making sense, a 5-percent holder can be either
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Owner Shift #2 - Bartlett 1 Megan Bartlett September 28,...

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