Carry forward of losses depends on continuity of majority voting power; startup exception preserves losses if original shareholders continue.

Carry forward and set off of losses in closely held companies is conditioned on continuity of majority voting power: losses from years prior to the previous year cannot be carried forward unless the persons holding a majority of voting power on the last day of the previous year are the same as those who held a majority when the loss was incurred; an eligible startup exception permits carry forward of losses incurred within seven years if original shareholders continue to hold their voting shares.

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