Carry Back and Carryover of NOLs Arising Before 2018
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Specific IRS rules apply to the carry back and carryover of net operating losses arising before 2018. These regulations are outlined below.
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Two Years (for losses originating in years before 2018) - Generally the carryback period is 2 years., There are exceptions to this rule for certain eligible losses as noted below.
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Three Years (for losses originating in years before 2018)- A three-year carryback is allowed for an “eligible loss,” as defined here:
Eligible Loss
An eligible loss is any part of an NOL that is:
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From a casualty or theft, or
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a loss attributable to a federally declared disaster for a qualified small business or farming business.
Qualified Small Business
A qualified small business is a sole proprietorship or a partnership that has average annual gross receipts (reduced by returns and allowances) of $5 million or less during the 3year period ending with the tax year of the NOL. If the business did not exist for this entire 3-year period, use the period the business was in existence.