NOLs and Capital Loss Limitations_M6

Question 1

What is the C-Corp capital loss carryforward/back rules?

Answer 1

• For C corporations, capital losses can only offset capital gains.
• A net capital loss is carried back three years and carried forward five years to offset net capital gains in other years.
• The net capital loss is carried back to the oldest year in the carryback period first.
• A net capital loss carryback cannot be carried back to a year if it creates or increases a net operating loss (NOL) for that year, meaning it is limited to taxable income.