Coordination with sections 383 and 163(j).

Official textecfr.govlast amended Jul 27, 2026

# (a) Coordination with section 383.

The rules contained in §§ 1.1502-91 through 1.1502-96 also apply for purposes of section 383, with appropriate adjustments to reflect that section 383 applies to credits and net capital losses. For example, subgroups with respect to the carryover of general business credits, minimum tax credits, unused foreign tax, and net capital loss are determined by applying the principles of § 1.1502-91(d)(1). Similarly, in the case of net capital losses, general business credits, and excess foreign taxes that are pre-change attributes, § 1.383-1 applies the principles of §§ 1.1502-91 through 1.1502-96. For example, if a loss group has an ownership change under § 1.1502-92 and has a carryover of unused general business credits from a pre-change consolidated return year to a post-change consolidated return year, the amount of the group's regular tax liability for the post-change year that can be offset by the carryover cannot exceed the consolidated section 383 credit limitation for that post-change year, determined by applying the principles of §§ 1.383-1(c)(6) and 1.1502-93 (relating to the computation of the consolidated section 382 limitation).

# (b)

Application to section 163(j)—(1) In general. The regulations in this part under sections 163(j), 382, and 383 of the Code contain rules governing the application of section 382 to interest expense governed by section 163(j) and the regulations in this part under section 163(j) of the Code. See, for example, §§ 1.163(j)-11(c), 1.382-2, 1.382-6, 1.382-7, and 1.383-1. The rules contained in §§ 1.1502-91 through 1.1502-96 apply these rules to members of a consolidated group, or corporations that join or leave a consolidated group, with appropriate adjustments. For example, for purposes of §§ 1.1502-91 through 1.1502-96, the term loss group includes a consolidated group in which any member is entitled to use a disallowed business interest expense carryforward, as defined in § 1.163(j)-1(b)(11), that did not arise, and is not treated as arising, in a SRLY with regard to that group. Additionally, a reference to net operating loss carryovers in §§ 1.1502-91 through 1.1502-96 generally includes a reference to disallowed business interest expense carryforwards. References to a loss or losses in §§ 1.1502-91 through 1.1502-96 include references to disallowed business interest expense carryforwards or section 382 disallowed business interest carryforwards, within the meaning of § 1.382-2(a)(7), as appropriate.

(2) Appropriate adjustments. For purposes of applying the rules in §§ 1.1502-91 through 1.1502-96 to current-year business interest expense (as defined in § 1.163(j)-1(b)(9)), disallowed business interest expense carryforwards, and section 382 disallowed business interest carryforwards, appropriate adjustments are required.

[T.D. 8824, 64 FR 36174, July 2, 1999, as amended by T.D. 8884, 65 FR 33760, May 25, 2000; T.D. 9905, 85 FR 56844, Sept. 14, 2020]

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