# § 383. Special limitations on certain excess credits, etc.
**(a)** **Excess credits**
**(1)** **In general** Under regulations, if an ownership change occurs with respect to a corporation, the amount of any excess credit for any taxable year which may be used in any post-change year shall be limited to an amount determined on the basis of the tax liability which is attributable to so much of the taxable income as does not exceed the section 382 limitation for such post-change year to the extent available after the application of section 382 and subsections (b) and (c) of this section.
**(2)** **Excess credit** For purposes of paragraph (1), the term “excess credit” means—
**(A)** any unused general business credit of the corporation under section 39, and
**(B)** any unused minimum tax credit of the corporation under section 53.
**(b)** **Limitation on net capital loss** If an ownership change occurs with respect to a corporation, the amount of any net capital loss under section 1212 for any taxable year before the 1st post-change year which may be used in any post-change year shall be limited under regulations which shall be based on the principles applicable under section 382. Such regulations shall provide that any such net capital loss used in a post-change year shall reduce the section 382 limitation which is applied to pre-change losses under section 382 for such year.
**(c)** **Foreign tax credits** If an ownership change occurs with respect to a corporation, the amount of any excess foreign taxes under section 904(c) for any taxable year before the 1st post-change taxable year shall be limited under regulations which shall be consistent with purposes of this section and section 382.
**(d)** **Pro ration rules for year which includes change** For purposes of this section, rules similar to the rules of subsections (b)(3) and (d)(1)(B) of section 382 shall apply.
**(e)** **Definitions** Terms used in this section shall have the same respective meanings as when used in section 382, except that appropriate adjustments shall be made to take into account that the limitations of this section apply to credits and net capital losses.
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**Source Credit**: (Added Pub. L. 92–178, title III, § 302(a), Dec. 10, 1971, 85 Stat. 521; amended Pub. L. 94–455, title VIII, § 806(f)(2), title X, § 1031(b)(5), title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1605, 1623, 1834; Pub. L. 95–30, title II, § 202(d)(3)(B), (C), May 23, 1977, 91 Stat. 148; Pub. L. 96–222, title I, § 103(a)(6)(G)(xiii), Apr. 1, 1980, 94 Stat. 211; Pub. L. 96–223, title II, § 232(b)(2)(C), (D), Apr. 2, 1980, 94 Stat. 276; Pub. L. 97–34, title II, § 221(b)(1)(C), (D), title III, § 331(d)(1)(C), (D), Aug. 13, 1981, 95 Stat. 246, 294; Pub. L. 98–369, div. A, title IV, § 474(r)(12)(A), (B), July 18, 1984, 98 Stat. 841; Pub. L. 99–514, title VI, § 621(b), (e)(1), Oct. 22, 1986, 100 Stat. 2265, 2266.)
## Editorial Notes
### Amendments
1986—, amended section generally. Prior to amendment, section read as follows: “If—
“(1) the ownership and business of a corporation are changed in the manner described in section 382(a)(1), or
“(2) in the case of a reorganization specified in paragraph (2) of section 381(a), there is a change in ownership described in section 382(b)(1)(B),
then the limitations provided in section 382 in such cases with respect to the carryover of net operating losses shall apply in the same manner, as provided under regulations prescribed by the Secretary, with respect to any unused business credit of the corporation which can otherwise be carried forward under section 39, to any unused credit of the corporation which could otherwise be carried forward under section 30(g)(2), to any excess foreign taxes of the corporation which could otherwise be carried forward under section 904(c), and to any net capital loss of the corporation which can otherwise be carried forward under section 1212.”
, repealed amendment by . See 1976 Amendment note below.
1984—, in catchline of section 383, as in effect prior to amendment by , as related to , substituted “Special limitations on unused business credits, research credits, foreign taxes, and capital losses” for “Special limitations on carryovers of unused investment credits, work incentive program credits, new employee credits, alcohol fuel credits, research credits, employee stock ownership credits, foreign taxes, and capital losses”.
, in catchline of section 383, as amended by , as related to , substituted “business credits, research credits” for “investment credits, work incentive program credits”.
, in catchline of section 383, as amended by , as related to , substituted “business credits” for “investment credits” and struck out references to work incentive program credits, new employee credits, alcohol fuel credits, and employee stock ownership credits.
, in section 383, as in effect prior to amendment by , as related to , substituted “with respect to any unused business credit of the corporation which can otherwise be carried forward under section 39, to any unused credit of the corporation which could otherwise be carried forward under section 30(g)(2), to any excess foreign taxes of the corporation which could otherwise be carried forward under section 904(c), and to any net capital loss of the corporation which can otherwise be carried forward under section 1212” for “with respect to any unused investment credit of the corporation which can otherwise be carried forward under section 46(b), to any unused work incentive program credit of the corporation which can otherwise be carried forward under section 50A(b), to any unused new employee credit of the corporation which could otherwise be carried forward under section 53(b), to any unused credit of the corporation which could otherwise be carried forward under section 44E(e)(2), to any unused credit of the corporation which could otherwise be carried forward under section 44F(g)(2), to any unused credit of the corporation which could otherwise be carried forward under section 44G(b)(2), to any excess foreign taxes of the corporation which can otherwise be carried forward under section 904(c), and to any net capital loss of the corporation which can otherwise be carried forward under section 1212”.
, in section 383, as amended by , as related to , substituted “with respect to any unused business credit of the corporation under section 39, to any unused credit of the corporation under section 30(g)(2), to any excess foreign taxes of the corporation under section 904(c), and to any net capital loss of the corporation under section 1212” for “with respect to any unused investment credit of the corporation under section 46(b), to any unused work incentive program credit of the corporation under section 50A(b), to any excess foreign taxes of the corporation under section 904(c), and to any net capital loss of the corporation under section 1212”.
, in section 383, as amended by , as related to , substituted “with respect to any unused business credit of the corporation under section 39, to any unused credit of the corporation under section 30(g)(2), to any excess foreign taxes of the corporation under section 904(c), and to any net capital loss of the corporation under section 1212” for “with respect to any unused investment credit of the corporation under section 46(b), to any unused work incentive program credit of the corporation under section 50A(b), to any unused new employee credit of the corporation under section 53(b), to any unused credit of the corporation under section 44E(e)(2), to any unused credit of the corporation under section 44F(g)(2), to any unused credit of the corporation under section 44G(b)(2), to any excess foreign taxes of the corporation under section 904(c), and to any net capital loss of the corporation under section 1212”.
1981—, (D)(ii), in catchlines of sections 383, as related to , before and after amendment by , inserted reference to employee stock ownership credits.
, in section 383, as in effect prior to amendment by , as related to , inserted “to any unused credit of the corporation which could otherwise be carried forward under section 44G(b)(2),”.
, in section 383, as amended by , as related to , inserted “to any unused credit of the corporation under section 44G(b)(2),”.
, (D)(ii), in catchlines of sections 383, as related to , before and after amendment by , inserted reference to research credits.
, in section 383, as in effect prior to amendment by , as related to , inserted “to any unused credit of the corporation which could otherwise be carried forward under section 44F(g)(2),” after “section 44E(e)(2),”.
, in section 383, as amended by , as related to , inserted “to any unused credit of the corporation under section 44F(g)(2),” after “section 44E(e)(2),”.
1980—, in section 383, as in effect prior to amendment by , as related to , inserted reference to unused alcohol fuel credits in section catchline and reference to any unused credit of the corporation which could otherwise be carried forward under section 44E(e)(2) in text.
, in section 383, as amended by , as related to , inserted reference to unused alcohol fuel credits in section catchline and reference to any unused credit of the corporation under section 44E(e)(2) in text.
, in sections 383, as related to , before and after amendment by , substituted “section 53(b)” for “section 53(c)”.
1977—, in section 383, as in effect prior to amendment by , as related to , inserted “to any unused new employee credit of the corporation which could otherwise be carried forward under section 53(c)” in text and “new employee credits,” in catchline.
, in section 383, as amended by , as related to , inserted “to any unused new employee credit of the corporation under section 53(c)” in text and “new employee credits,” in section catchline.
1976—, §§ 1031(b)(5), 1906(b)(13)(A), struck out “or his delegate” after “Secretary”, and substituted “section 904(c)” for “section 904(d)”, respectively, in section 383 set out first.
, which substituted, in sections 383 as related to section 382(a) and (b) of this title, provisions that the net operating loss limitations in section 382 shall apply to unused investment credits under section 46(b), to unused work incentive program credits under section 50A(b), to excess foreign taxes under section 904(d) and to net capital losses under section 1212 for provisions that the net operating loss carryover limitations in section 382 shall apply, in the case of ownership changes described in section 382(a)(1) or reorganizations specified in section 381(a)(2) resulting in ownership changes described in section 382(b)(1)(B), to unused investment credits under section 46(b), to unused work incentive program credits under section 50A(B), to excess foreign taxes under section 904(c), and to net capital losses under section 1212, was repealed by . See Effective Date of 1986 and 1976 Amendment notes below.
## Statutory Notes and Related Subsidiaries
### Effective Date of 1986 Amendment
Amendment by applicable to any ownership change after , except as otherwise provided, see , as amended, set out as a note under .
Repeal of amendment by effective , with certain exceptions, see , set out as a note under .
### Effective Date of 1984 Amendment
Amendment by applicable to taxable years beginning after , and to carrybacks from such years, see , set out as a note under .
### Effective Date of 1981 Amendment
Amendment by section 221(b)(1)(C), (D) of applicable to amounts paid or incurred after , see , as amended, set out as an Effective Date note under .
Amendment by section 331(d)(1)(C), (D) of applicable to taxable years beginning after , see , set out as a note under .
### Effective Date of 1980 Amendments
Amendment by applicable to sales or uses after , in taxable years ending after such date, see , set out as an Effective Date note under .
Amendment by effective, except as otherwise provided, as if it had been included in the provisions of the Revenue Act of 1978, , , , to which such amendment relates, see , set out as a note under .
### Effective Date of 1976 Amendment
For effective date of amendment by , see , set out as a note under .
For purposes of applying this section (as it relates to ) as amended by section 806(e), (f) of , the amendments made by section 806(e), (f) of effective for taxable years beginning after , with specified provisions for determining the beginning of the taxable years specified in , and this section (as it relates to ) as amended by section 806(e), (f) of to apply (and such sections as in effect prior to such amendment not to apply) to reorganizations pursuant to a plan of reorganization adopted by one or more of the parties thereto on or after , see section 806(g)(2), (3) of , as amended, formerly set out as a note under .
### Effective Date
> “The amendments made by this section [enacting this section] shall be applicable only with respect to reorganizations and other changes in ownership occurring after the date of enactment of this Act [
>
> ] pursuant to a plan of reorganization or contract entered into on or after
>
> .”
, , , provided that:
### Delay in Effective Date of 1976 Amendment
For election by taxpayer for application of prior law with respect to any acquisition or reorganization occurring before the end of the taxpayer’s first taxable year beginning after , see , set out as a Delay in Effective Date of 1976 Amendment note under .