NOLs and Capital Loss Limitations

Question 1

How are NOLs utilized for corporations?

Answer 1

NOLs for tax years ending on or before 2017: carryback 2yrs and carryforward 20yrs (offsets 100% of taxable income)

NOLs for tax years 2018, 2019, 2020: carryback 5yrs and carryforward indefinitely (NOLs carried forward can offset 100% of taxable income 2018-2020, but can only offset 80% of taxable for 2021 and later)

NOLs for years 2021 and later: no carryback and carryforward indefinitely (NOLs carried forward can offset 100% of taxable income 2018-2020, but can only offset 80% of taxable for 2021 and later)

Question 2

How are corporate net capital losses different from individual net capital losses?

Answer 2

Corporate net capital losses can be carried back 3yrs and carried forward 5yrs (they expire after the 5yrs). Capital losses can only offset capital gains

Individual capital losses cannot be carried back, but they can be carried forward indefinitely. In addition, up to $3,000 can offset other income