Proposed and temporary regulations provide guidance for consolidated groups regarding net operating losses (NOLs). Specifically, the proposed regulations explain application of the rule enacted by the Tax Cuts and Jobs Act which limits the NOL deduction to 80 percent of taxable income less pre-2018 NOLs, effective for tax years beginning after 2020. In addition, the proposals remove obsolete provisions from the rules for consolidated groups that contain both life insurance companies and nonlife insurance companies.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) allows NOLs arising in tax year to be carried back five years, effective for NOLs arising in tax years beginning after 2017 and before 2021. Temporary regulations allow certain acquiring consolidated groups to make an election to waive all or a portion of the pre-acquisition portion of this extended carryback period for certain losses attributable to certain acquired members.
Wilson Tax Law Group, APLC (www.wilsontaxlaw.com) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense. Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board. Wilson Tax Law Group is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division.
For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC
Newport Beach and Yorba Linda, California