Net operating loss

Question 1

What are the treatment options for a net operating loss occurring in tax years after December 31, 2017, and before January 1, 2021?

Answer 1

*Five-year carryback and indefinite carryforward

*NOL carryforward form pre-2018 and earlier tax years can offset 100% of a future year’s taxable income - Carried back 2 yrs and carried forward 20 yrs

*NOL carryforward form post-2017 tax years can offset 100% of a taxable income in 2018, 2019 and 2020 - Can be carried back 5 yrs and carried forever.

NOL for 2021 - No carried back only carried forward forever

Question 2

What are the treatment options for a net operating loss occurring in 2021

Basically - NOL’s carried forward can offset 100% taxable income in 2018-2020 and 80% of taxable income for 2021 and later

Answer 2

• Cannot be use against capital loss