A: Both bills eliminate net operating loss carrybacks
. Both bills also make changes to the treatment of loss carryforwards.
* The attempted repeal of the net operating loss carrybacks
, AB 2408 (Skinner).
617),Jay Starkman suggested a tax planning technique using net operating loss carrybacks
and carryforwards and cautioned that there is no benefit to a personal service corporation in making a Sec.
Observation: Normally, the tax law restricts net operating loss carrybacks
generated by interest expense allocable to a corporate equity reduction transaction (CERT), in which one corporation acquires at least 50% of another's stock.
In other words, net operating loss carrybacks
and carryovers must be applied against income of the estate before any administrative expense loss carrybacks or carryovers.
Hedgpeth next explained that the Office of Chief Counsel is developing additional language providing guidance for waivers in four areas: (1) new entities entering a taxpayer's return as a result of merger and acquisition activity; (2) the effect of net operating loss carrybacks
; (3) Chapter 7 bankruptcy proceedings; and (4) final entity tax returns.