Through a "Type C" reorganization, Springer Corporation was merged into Spaniel Corporation last year. Springer shareholders received 40% of the Spaniel stock in exchange for all of their Springer shares. Springer liquidated immediately after the exchange. At the time of the merger, Springer was worth $2 million and held a $500,000 NOL. If Spaniel reports taxable income of $800,000 for the current year, how much of the Springer NOL can be utilized by Spaniel? Assume that the applicable Federal long-term tax-exempt rate is 4%.
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