Acquisition of control is one of the most technical and consequential areas in corporate tax practice. When control of a corporation changes hands, a loss restriction event can occur, which immediately triggers several tax rules. These include a deemed year-end, forced write-downs of losses and assets, restrictions on using prior losses, and changes in how future losses can be applied. The slides illustrate numerous situations where an acquisition of control is either triggered or avoided, including vote-based changes, transactions involving more than 75 percent of value, multi-step unrelated-party acquisitions, and scenarios where anti-avoidance rules apply.

This course provides CPAs with a practical understanding of how the rules apply across a wide range of real situations. You will learn how trusts complicate the analysis, why related-person exceptions matter, how death can create exceptions, and how changes in trustees can result in unexpected outcomes. The material also explains how the rules apply to value-based transfers, what happens when shares are rolled between related entities, and how downstream distributions or reorganizations can inadvertently cause an acquisition of control. The goal is to help practitioners navigate these rules accurately and prevent unintended loss restriction events.

Acquisition of Control explains when a loss restriction event occurs and how the rules apply in real situations. The session outlines the two core triggers shown in the material: a change in voting control and a transfer of more than 75 percent of a corporation’s value. You will see how related-person exceptions work, why trust structures often create unexpected control changes, and how changes in trustees or distributions from a trust can trigger an acquisition of control. The material also highlights the special rule that prevents an acquisition of control when shares pass to a deceased person’s estate.

The course then summarizes the key tax consequences that follow an acquisition of control. These include a deemed year-end, required write-downs of certain assets and pools, and restrictions on how capital, property, and non-capital losses may be used in the future. You will also learn which tax attributes are affected, when losses can be carried back, and how certain elections can help align gains and losses. The session reinforces that acquisition of control rules can produce both beneficial and adverse outcomes and that careful analysis is essential before or after any change in ownership occurs.