Consolidated Return Change of Ownership

About Consolidated Return Change of Ownership:

Consolidated Return Change Of Ownership (CRCO) is a situation in which there has been a 50 percentage point change in the ownership of the parent corporation (measured for the 10 major shareholders after the change), and the change in ownership is due to the purchase or redemption of stock. If a group is subject to a CRCO, net operating losses and other tax attributes sustained before the change may be carried forward to consolidated return years after the change only to the extent, if any, that the old members of the group generate income in these later years. This limitation prevents a consolidated group from carrying forward losses sustained before a CRCO and offsetting these losses against the profits of corporations who become members of the group after the CRCO. Former Tax Regulation (check if this Reg. is current here) §1.1502-1.