For example, deductible temporary differences that reverse in the near term--such as those related to warranty accruals--might provide a tax benefit either by
carryback or as an offset to future taxable income.
The taxpayer failed to carry back the 1963 NOL to the three preceding years (the applicable
carryback period at that time was three years) and instead carried the NOL forward and attempted to claim a deduction on the 1968 return.
Without an extension to 2010 of the research credit, the credit
carryback opportunity was of little or no value to many businesses.
Since there are no specific provisions in the New York Tax Law about the bonus depreciation or NOL
carryback period, the federal provisions have been incorporated into the New York Tax law.
Pending release of corrected forms and instructions within the next 30 days, the IRS should publish a notice reaffirming the proper procedure for filing loss (or other unused credit)
carryback claims when foreign tax credits are released.
The system comes with a plastic shield to further dispose of
carryback and remove final residue.
A common perception is that claiming a
carryback refund on Form 1120X results in less exposure to the taxpayer, since once the normal limitation period on assessment for the
carryback year has expired, the only deficiency that can be assessed for that year is one attributable to the loss or credit
carryback.
Another consideration is the state treatment of a federal election to forgo an NOL
carryback. While most states do not allow
carrybacks, those that do may require a taxpayer to make a state-specific election to forgo a
carryback independent of the federal election.
6, 2009, expanded ARRA's
carryback provisions to allow all businesses, except those that received certain benefits (whether or not repaid) under the Troubled Assets Relief Program (TARP), with an "applicable NOL" to
carryback that NOL to the prior five tax years.
Five-year NOL
carryback. The act temporarily extends the general NOL
carryback period to five years for NOLs arising in taxable years ending in 2001 and 2002.
TEI supports the extension of the net operating loss
carryback period from two years to five years, effective for taxable years ending on or after September 30, 2000.
If the
carryback adjustment is part of an IRS audit that has adjustments to the return and
carrybacks from subsequent years' returns, the IRS is required to coplete a Form 2285, Computation of Increase (Decrease) in Tax, Concurrent Determinations of Deficiencies (Increases in Tax) and Overassessments (Decreases in Tax) in Cases Involving Restricted Interest Provisions of the Internal Revenue Code (commonly called a restricted interest worksheet).
