| Msummit: thank you for userpage input. I was going to refer you to the Sections 381 and 382, which Dennis has referenced. You cannot sell a tax loss carryforward. The rules of sections 381 and 382 and 1501 and 1502 form the basis of what are called in the industry argot: the SRLY rules: separate return loss years.
These rules are technical and I highly recommend you engage a professional who is conversant with such matters. There are exceptions to the general rule I give below and the application of the tax law must be based on facts and circumstances of the actual situation. That said, losses of an acquired subsidary may be used, but are limited in the amount usable per year to a percentage of the losses based on federal interest rates (eg 10% of SRLY losses if the applicable federal interest rate was 10%).
There are also rules against trafficking in losses that may well apply in the plan you describe. With the amounts you are describing, it is worth it to find a competent tax professional for assistance. If you are a real do-it-yourselfer (again I strongly advise against this) get a copy of Bittker and Eustice "Federal income taxation of corporations and shareholders", available through Amazon.com, and read chapters 13 and 14. If reading through this material does not convince you to find a tax advisor, go for it.
WillyB
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