The National Directory of Certified Public Accountants

Ask A CPA - Small Business Services

Do I Have To Carryback My Current Year 'S Net Operating Loss ?

No. You can choose not to carry back your NOL. If you make this choice, then you can use your NOL only in the carryforward period. (This choice means you also choose not to carry back any alternative tax NOL.) To make this choice, attach a statement to your original return filed by the due date (including extensions) for the NOL year. This statement must show that you are choosing to waive the carryback period under section 172(b)(3) of the Internal Revenue Code. If you filed your return timely but did not file the statement with it, you must file the statement with an amended return for the NOL year within 6 months of the due date of your original return (excluding extensions). Enter “Filed pursuant to section 301.9100-2” at the top of the statement. Once you choose to waive the carryback period, it generally is irrevocable. If you choose to waive the carryback period for more than one NOL, you must make a separate choice and attach a separate statement for each NOL year. Speak to your local CPA about the tax strategies invovled and the election form that must accompany the current year's return that caused the net operating loss.

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