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The proposed regulations contain guidance concerning the treatment of attributes in reorganizations under section 368(a)(1), where the acquiring corporation is a shareholder in the target corporation, the target corporation terminates its existence, is able to make a distribution on only one class of its stock, and the acquiring corporation succeeds to the target corporation's attributes under section 381, while the shareholder whose stock is eliminated for no consideration claims a loss. The proposed regulations provide that, to the extent such loss is duplicated in the attributes of the target corporation following its termination, the target corporation's attributes are reduced by the target corporation's attribute reduction amount.