Common use of Recognized built-in gain carryover Clause in Contracts

Recognized built-in gain carryover. If an S corporation’s net recognized built-in gain for any taxable year is equal to its taxable income limitation, the amount by which its pre-limitation amount exceeds its taxable income limitation is a recognized built-in gain carryover included in its pre-limitation amount for the succeeding taxable year. The recognized built-in gain car- ryover consists of that portion of each item of income, gain, loss, and deduc- tion not included in the S corporation’s net recognized built-in gain for the year the carryover arose, as deter- mined under paragraph (b) of this sec- tion.