Excess Loss Account

Excess Loss Account

Excess Loss Account means:
a potentially taxable account that must be taken into income (to the extent that it has not been subsequently reduced by positive adjustments or contributions to capital) when the parent organization disposes of a subsidiary's stock. This negative-basis account is created when a net operating loss (that is fully utilized in a consolidated tax return) of a subsidiary is greater than the adjusted (tax) basis of the subsidiary's stock.


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