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Treasury and the IRS released on October 13 Final Regulations under Section 1502 implementing recent statutory amendments to Section 172 relating to the absorption of consolidated net operating loss (CNOL) carryovers and carrybacks. Treasury and the IRS on July 8, 2020 published proposed and temporary Section 1502 regulations (the 2020 Proposed Regulations and 2020 Temporary Regulations) implementing the amendments to Section 172.

Our prior PwC Insight outlined highlights of the 2020 Proposed Regulations and 2020 Temporary Regulations. Because the Final Regulations adopt the provisions of the 2020 Proposed Regulations, with certain modifications discussed below, but do not adopt or modify the text contained in the 2020 Temporary Regulations, this Insight describes the most significant changes from the 2020 Proposed Regulations.