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November 2021

Protecting Net Operating Losses in Distressed Investments

November 23, 2021 by Matt Ehinger, Michael Ott,
The authors of this article provide an overview of the rules pertaining to net operating losses in bankruptcy.

Many businesses recognized significant net operating losses or “NOLs” as a result of the COVID-19 pandemic. The Internal Revenue Code of 1986, as amended (the “Code”), generally allows many types of taxpayers (including individuals, estates and trusts, exempt organizations, and most C corporations) to utilize NOLs to offset taxable income in other tax years, subject to certain limitations. 

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