### Question
How does CARRYOVERS define recognized built-in gain?


### Answer
Under *26 U.S.C. § 382*, **recognized built-in gain** is defined as:

> any gain recognized during the recognition period on the disposition of any asset to the extent the new loss corporation establishes that—


(i) such asset was held by the old loss corporation immediately before the change date, and


(ii) such gain does not exceed the excess of—


(I) the fair market value of such asset on the change date, over


(II) the adjusted basis of such asset on such date

#### Citation:
  - *26 U.S.C. § 382*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter C-Corporate Distributions and Adjustments > PART V-CARRYOVERS**

