### Question
What is the definition of recognized built-in loss?


### Answer
The definition of **recognized built-in loss** is as follows in *26 U.S.C. § 382*:

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


(i) such asset was not held by the old loss corporation immediately before the change date, or


(ii) such loss exceeds the excess of—


(I) the adjusted basis of such asset on the change date, over


(II) the fair market value 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**

