Las Vegas Corporation is in the business of developing software used exclusively by multinational corporations. Among its assets are innovative soft ware, valuable trademarks, outstanding corporate name recognition, and a large NOL carryover. These assets make Las Vegas a very appealing takeover prospect to the Santa Fe Corporation.

Santa Fe is a little-known corporation that distributes software products to corporate clients. It is the largest business of its kind and is quite profitable. After entering into negotiations, Santa Fe learns that the trademarks of Las Vegas are not legally transferable. With further planning, the combination is expected to take place on June 30 of next year.

The President of Santa Fe, Darla Threestars, has requested your expert advice on two matters. First, Threestars would like to know what type of reorganization would be most effective in acquiring Las Vegas. Second, will the § 381 NOL limitation apply after the reorganization? Third, Santa Fe is subject to the alternative minimum tax (AMT) each year and assumes this situation will continue in the future. Does the § 381 only limit the amount of NOL that can offset regular tax in the first year or does it also apply to the AMT as well? Draft a letter to Darla Threestars explaining your conclusions. Her address is 1235 Pinto Drive, Santa Fe, NM 87505.