What is Georgias treatment for net operating loss carryforwards when c-corporations merge?
• If both c-corporations before the merger are subject to taxation in Georgia, then the corporation with the net operating loss carry forward at the time of the merger can carry forward its Georgia loss into the new entity if the loss is allowed to be carried forward for Federal income tax purposes. If the c-corporation with the carry forward loss was not subject to taxation in Georgia, then it would not have a Georgia net operating loss. • A corporation that is a member of an affiliated group is sold and becomes a member of a new affiliated group. The IRS requires the corporation to file two short period returns so that each can be included on different consolidated returns. For Georgia purposes the corporation is filing separate returns (not as part of a consolidated return). How should they file with Georgia? • The Department will accept one full year return or they can file two short period returns.
