Source: https://irc.bloombergtax.com/public/uscode/doc/irc/172
Timestamp: 2019-05-19 17:23:04
Document Index: 715068959

Matched Legal Cases: ['§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172', '§ 172']

Internal Revenue Code, § 172. Net Operating Loss Deduction
I.R.C. § 172(a) Deduction Allowed —
I.R.C. § 172(a)(1) —
the aggregate of the net operating loss carryovers to such year, plus the net operating loss carrybacks to such year, or
I.R.C. § 172(a)(2) —
80 percent of taxable income computed without regard to the deduction allowable under this section.
I.R.C. § 172(b) Net Operating Loss Carrybacks And Carryovers
I.R.C. § 172(b)(1) Year To Which Loss May Be Carried
I.R.C. § 172(b)(1)(A) General Rule —
I.R.C. § 172(b)(1)(A)(i) —
except as otherwise provided in this paragraph, shall not be a net operating loss carryback to any taxable year preceding the taxable year of such loss, and
I.R.C. § 172(b)(1)(A)(ii) —
shall be a net operating loss carryover to each taxable year following the taxable year of the loss.
I.R.C. § 172(b)(1)(B) Farming Losses
I.R.C. § 172(b)(1)(B)(i) In General —
I.R.C. § 172(b)(1)(B)(ii) Farming Loss —
For purposes of this section, the term “farming loss” means the lesser of—
I.R.C. § 172(b)(1)(B)(ii)(I) —
I.R.C. § 172(b)(1)(B)(ii)(II) —
I.R.C. § 172(b)(1)(B)(iii) Coordination With Paragraph (2) —
—For purposes of applying paragraph (2), a farming loss for any taxable year shall be treated as a separate net operating loss for such taxable year to be taken into account after the remaining portion of the net operating loss for such taxable year.
I.R.C. § 172(b)(1)(B)(iv) Election —
I.R.C. § 172(b)(1)(C) Insurance Companies —
I.R.C. § 172(b)(1)(C)(i) —
I.R.C. § 172(b)(1)(C)(ii) —
I.R.C. § 172(b)(2) Amount Of Carrybacks And Carryovers —
The entire amount of the net operating loss for any taxable year (hereinafter in this section referred to as the “loss year”) shall be carried to the earliest of the taxable years to which (by reason of paragraph (1)) such loss may be carried. The portion of such loss which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of such loss over the sum of the taxable income for each of the prior taxable years to which such loss may be carried. For purposes of the preceding sentence, the taxable income for any such prior taxable year shall—
I.R.C. § 172(b)(2)(A) —
be computed with the modifications specified in subsection (d) other than paragraphs (1), (4), and (5) thereof, and by determining the amount of the net operating loss deduction without regard to the net operating loss for the loss year or for any taxable year thereafter,
I.R.C. § 172(b)(2)(B) —
not be considered to be less than zero, and
I.R.C. § 172(b)(2)(C) —
not exceed the amount determined under subsection (a)(2) for such prior taxable year.
I.R.C. § 172(b)(3) Election To Waive Carryback. —
I.R.C. § 172(c) Net Operating Loss Defined —
For purposes of this section, the term “net operating loss” means the excess of the deductions allowed by this chapter over the gross income. Such excess shall be computed with the modifications specified in subsection (d).
I.R.C. § 172(d) Modifications —
I.R.C. § 172(d)(1) Net Operating Loss Deduction —
I.R.C. § 172(d)(2) Capital Gains And Losses Of Taxpayers Other Than Corporations —
I.R.C. § 172(d)(2)(A) —
I.R.C. § 172(d)(2)(B) —
I.R.C. § 172(d)(3) Deduction For Personal Exemptions —
I.R.C. § 172(d)(4) Nonbusiness Deductions Of Taxpayers Other Than Corporations —
I.R.C. § 172(d)(4)(A) —
any gain or loss from the sale or other disposition of—
I.R.C. § 172(d)(4)(A)(i) —
I.R.C. § 172(d)(4)(A)(ii) —
real property used in the trade or business, shall be treated as attributable to the trade or business;
I.R.C. § 172(d)(4)(B) —
I.R.C. § 172(d)(4)(C) —
I.R.C. § 172(d)(4)(D) —
I.R.C. § 172(d)(5) Computation Of Deduction For Dividends Received —
I.R.C. § 172(d)(6) Modifications Related To Real Estate Investment Trusts —
I.R.C. § 172(d)(6)(A) —
the net operating loss for such taxable year shall be computed by taking into account the adjustments described in section 857(b)(2) (other than the deduction for dividends paid described in section 857(b)(2)(B));
I.R.C. § 172(d)(6)(B) —
where such taxable year is a “prior taxable year” referred to in paragraph (2) of subsection (b), the term “taxable income” in such paragraph shall mean “real estate investment trust taxable income” (as defined in section 857(b)(2)), and
I.R.C. § 172(d)(6)(C) —
subsection (a)(2) shall be applied by substituting “real estate investment trust taxable income (as defined in section 857(b)(2) but without regard to the deduction for dividends paid (as defined in section 561))” for “taxable income”.
I.R.C. § 172(d)(7) —
[Repealed. Pub. L. 115-97, Sec. 13305(b)(3), Dec. 22, 2017
I.R.C. § 172(d)(8) Qualified Business Income Deduction —
I.R.C. § 172(d)(9) Deduction For Foreign-Derived Intangible Income —
I.R.C. § 172(e) Law Applicable To Computations —
I.R.C. § 172(f) Special Rule For Insurance Companies —
I.R.C. § 172(f)(1) —
the amount of the deduction allowed under subsection (a) shall be the aggregate of the net operating loss carryovers to such year, plus the net operating loss carrybacks to such year, and
I.R.C. § 172(f)(2) —
subparagraph (C) of subsection (b)(2) shall not apply.
I.R.C. § 172(g) Cross References
I.R.C. § 172(g)(1) —
I.R.C. § 172(g)(2) —
(Aug. 16, 1954, ch. 736, 68A Stat. 63 ; Sept. 2, 1958, Pub. L. 85-866, title I, Sec. 14(a), (b), 64(b), title II, Sec. 203(a), (b), 72 Stat. 1611, 1656, 1678; Sept. 27, 1962, Pub. L. 87-710, Sec. 1, 76 Stat. 648; Oct. 10, 1962, Pub. L. 87-792, Sec. 7(f), 76 Stat. 829; Oct. 11, 1962, Pub. L. 87-794, title III, Sec. 317(b), 76 Stat. 889; Feb. 26, 1964, Pub. L. 88-272, title II, Sec. 210(a), (b), 234(b)(5), 78 Stat. 47, 48, 115; Dec. 27, 1967, Pub. L. 90-225, Sec. 3(a), 81 Stat. 732; Dec. 30, 1969, Pub. L. 91-172, title IV, Sec. 431(b), 83 Stat. 619; Jan. 12, 1971, Pub. L. 91-677, Sec. 2(a)-(c), 84 Stat. 2061; Oct. 4, 1976, Pub. L. 94-455, title VIII, Sec. 806(a)-(c), title X, Sec. 1052(c)(3), title XVI, Sec. 1606(b), (c), title XIX, Sec. 1901(a)(29), 1906(b)(13)(A), title XXI, Sec. 2126, 90 Stat. 1598, 1648, 1755, 1756, 1769, 1834, 1920; May 23, 1977, Pub. L. 95-30, title I, Sec. 102(b)(2), 91 Stat. 137; Nov. 6, 1978, Pub. L. 95-600, title III, Sec. 371(a), (b), title VI, Sec. 601(b)(1), title VII, Sec. 701(d)(1), 703(p)(1), 92 Stat. 2859, 2896, 2900, 2943; Apr. 1, 1980, Pub. L. 96-222, title I, Sec. 103(a)(15), 106(a)(1), (6), (7), 94 Stat. 214, 221; Dec. 24, 1980, Pub. L. 96-595, Sec. 1(a), 94 Stat. 3464; Aug. 13, 1981, Pub. L. 97-34, title II, Sec. 207(a), 95 Stat. 225; Oct. 19, 1982, Pub. L. 97-354, Sec. 5(a)(22), 96 Stat. 1694; Oct. 25, 1982, Pub. L. 97-362, title I, Sec. 102(a)-(c), 96 Stat. 1727, 1728; July 18, 1984, Pub. L. 98-369, div. A, title I, Sec. 91(d), 177(c), title IV, Sec. 491(d)(5), title VII, Sec. 722(a)(4), 98 Stat. 606, 710, 849, 973; Oct. 22, 1986, Pub. L. 99-514, title I, Sec. 104(b)(4), title III, Sec. 301(b)(3), title IX, Sec. 901(d)(4)(B), 903(a), (b), title XIII, Sec. 1303(b)(1), (2), title XVIII, Sec. 1899A(6), 100 Stat. 2105, 2217, 2380, 2383, 2658, 2958; Nov. 10, 1988, Pub. L. 100-647, title I, Sec. 1003(a)(1), 1009(c), 102 Stat. 3382, 3449; Dec. 19, 1989, Pub. L. 101-239, title VII, Sec. 7211(a), (b), 103 Stat. 2342, 2343; Nov. 5, 1990, Pub. L. 101-508, title XI, Sec. 11324(a), 11701(d), 11704(a)(2), 11811(a)-(b)(2)(A), (3), (4), 104 Stat. 1388-465, 1388-507, 1388-518, 1388-530, 1388-532 to 1388-534; Aug. 10, 1993, Pub. L. 103-66, title XIII, Sec. 13113(d)(1); Aug. 20, 1996, Pub. L. 104-188, title I, Sec. 1702(h)(2), (16), 1704(t)(5), (30), 110 Stat. 1755; Pub. L. 105-34, title X, Sec. 1082, Aug. 5, 1997, 111 Stat 788; Pub. L. 105-277, title II, III, and IV, Sec. 2013, 3004(a), 4003(h), 4004(a), Oct. 21, 1998, 112 Stat 2681; Pub. L. 107-147, title I, IV, Sec. 102, 417, Mar. 9, 2002, 116 Stat. 21; Pub. L. 108-311, title IV, Sec. 403(b)(1), Oct. 4, 2004, 118 Stat. 1166; Pub. L. 109-58, title XIII, Sec. 1311, Aug. 8, 2005, 119 Stat. 594Pub. L. 109-135, title IV, Sec. 402(f), 403(a)(17), Dec. 21, 2005, 119 Stat. 2577; Pub. L. 110-343, div. C, title VII, Sec. 706(a)(2), 708, Oct. 3, 2008, 122 Stat. 3765; Pub. L. 111-5, div. B, title I, Sec. 1211, Feb. 17, 2009, 123 Stat. 115; Pub. L. 111-92, Sec. 13, Nov. 6, 2009, 123 Stat. 2984; Pub. L. 113-295, Div. A, title II, Sec. 211(c), 221(a)(30), 221(a)(41), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 115-97, title I, Secs. 11011(d)(1), 13302, 13305(b)(3), 14202(b)(1), Dec. 22, 2017, 131 Stat. 2054; Pub. L. 115-141, Div. T, Sec. 101(a)(2)(B), Div. U, Sec. 401(a)(53), Mar. 23, 2018, 132 Stat. 348.)
2018 - Subsec. (d)(5). Pub. L. 115-141, Div. U, Sec. 401(a)(53), amended par. (5) by substituting “sections 243” for “section 243”.
Subsec. (d)(8). Pub. L. 115-141, Div. T, Sec. 101(a)(2)(B), amended par. (8) by substituting “Any deduction” for “The deduction”.
2017 - Subsec. (a). Pub. L. 115-97, Sec. 13302(a)(1), amended subsec. (a). Before amendment, it read as follows:
“(a) Deduction Allowed.—There shall be allowed as a deduction for the taxable year an amount equal to the aggregate of (1) the net operating loss carryovers to such year, plus (2) the net operating loss carrybacks to such year. For purposes of this subtitle, the term “net operating loss deduction” means the deduction allowed by this subsection.”
Subsec. (b)(1)(A)(i). Pub. L. 115-97, Sec. 13302(b)(1)(A), amended clause (i) by substituting ‘‘except as otherwise provided in this paragraph, shall not be a net operating loss carryback to any taxable year’’ for ‘‘shall be a net operating loss carryback to each of the 2 taxable years’’.
Subsec. (b)(1)(A)(ii). Pub. L. 115-97, Sec. 13302(b)(1)(B), amended clause (ii) by substituting “to each taxable year” for “to each of the 20 taxable years”.
Subsec. (b)(1)(B)-(F). Pub. L. 115-97, Sec. 13302(b)(2), amended par. (1) by striking subpars. (B)-(F). Before being struck, they read as follows:
“(B) Special Rules For REIT's
“(i) In General.—A net operating loss for a REIT year shall not be a net operating loss carryback to any taxable year preceding the taxable year of such loss.
“(ii) Special Rule.—In the case of any net operating loss for a taxable year which is not a REIT year, such loss shall not be carried back to any taxable year which is a REIT year.
“(iii) REIT Year.—For purposes of this subparagraph, the term “REIT year” means any taxable year for which the provisions of part II of subchapter M (relating to real estate investment trusts) apply to the taxpayer.”
“(C) Specified Liability Losses.—In the case of a taxpayer which has a specified liability loss (as defined in subsection (f)) for a taxable year, such specified liability loss shall be a net operating loss carryback to each of the 10 taxable years preceding the taxable year of such loss.”
“(D) Excess Interest Loss
“(I) there is a corporate equity reduction transaction, and
“(II) an applicable corporation has a corporate equity reduction interest loss for any loss limitation year, then the corporate equity reduction interest loss shall be a net operating loss carryback and carryover to the taxable years described in subparagraph (A), except that such loss shall not be carried back to a taxable year preceding the taxable year in which the corporate equity reduction transaction occurs.
“(ii) Loss Limitation Year.—For purposes of clause (i) and subsection (g), the term “loss limitation year” means, with respect to any corporate equity reduction transaction, the taxable year in which such transaction occurs and each of the 2 succeeding taxable years.
“(iii) Applicable Corporation.—For purposes of clause (i), the term ”applicable corporation” means—
“(I) a C corporation which acquires stock, or the stock of which is acquired in a major stock acquisition,
“(II) a C corporation making distributions with respect to, or redeeming, its stock in connection with an excess distribution, or
“(III) a C corporation which is a successor of a corporation described in subclause (I) or (II).
“(iv) Other Definitions.—For definitions of terms used in this subparagraph see subsection (h).”
“(E) Retention Of 3-Year Carryback In Certain Cases
“(i) In General.—Subparagraph (A)(i) shall be applied by substituting “3 taxable years” for “2 taxable years” with respect to the portion of the net operating loss for the taxable year which is an eligible loss with respect to the taxpayer.
“(ii) Eligible Loss.—For purposes of clause (i), the term “eligible loss” means—
“(I) in the case of an individual, losses of property arising from fire, storm, shipwreck, or other casualty, or from theft,
“(II) in the case of a taxpayer which is a small business, net operating losses attributable to federally declared disasters (as defined in section 165(i)(5)), and
“(III) in the case of a taxpayer engaged in the trade or business of farming (as defined in section 263A(e)(4)), net operating losses attributable to such federally declared disasters.
“Such term shall not include any farming loss (as defined in subsection (h)) or qualified disaster loss (as defined in subsection (j)).
“(iii) Small Business.—For purposes of this subparagraph, the term “small business” means a corporation or partnership which meets the gross receipts test of section 448(c) for the taxable year in which the loss arose (or, in the case of a sole proprietorship, which would meet such test if such proprietorship were a corporation).
“(iv) Coordination With Paragraph (2).—For purposes of applying paragraph (2), an eligible loss for any taxable year shall be treated in a manner similar to the manner in which a specified liability loss is treated.”
“(F) Farming Losses.—In the case of a taxpayer which has a farming loss (as defined in subsection (h)) for a taxable year, such farming loss shall be a net operating loss carryback to each of the 5 taxable years preceding the taxable year of such loss.”
Subsec. (b)(1)(B). Pub. L. 115-97, Sec. 13302(c)(1), amended par. (1) by adding a new subpar. (B).
Subsec. (b)(1)(C). Pub. L. 115-97, Sec. 13302(d)(1), amended par. (1) by adding a new subpar. (C).
Subsec. (b)(2). Pub. L. 115-97, Sec. 13302(a)(2), amended par. (2) by substituting ‘‘shall— ‘‘(A) be computed with the modifications specified in subsection (d) other than paragraphs (1), (4), and (5) thereof, and by determining the amount of the net operating loss deduction without regard to the net operating loss for the loss year or for any taxable year thereafter, (B) not be considered to be less than zero, and (C) not exceed the amount determined under subsection (a)(2) for such prior taxable year.’’ for “shall be computed—(A) with the modifications specified in subsection (d) other than paragraphs (1), (4), and (5) thereof, and (B) by determining the amount of the net operating loss deduction without regard to the net operating loss for the loss year or for any taxable year thereafter, and the taxable income so computed shall not be considered to be less than zero.”
Subsec. (d)(6)(A)-(C). Pub. L. 115-97, Sec. 13302(a)(3), amended par. (6) by striking “and” at the end of subpar. (A), by substituting “, and” for the period at the end of subpar. (B), and by adding new subpar. (C).
Subsec. (d)(7). Pub. L. 115-97, Sec. 13305(b)(3), amended subsec. (d) by striking par. (7). Before being struck, it read as follows:
“(7) Manufacturing Deduction The deduction under section 199 shall not be allowed.”
Subsec. (d)(8). Pub. L. 115-97, Sec. 11011(d)(1), amended subsec. (d) by adding par. (8).
Subsec. (d)(9). Pub. L. 115-97, Sec. 14202(b)(1), amended subsec. (d) by adding par. (9).
Subsec. (f)-(h). Pub. L. 115-97, Sec. 13302(c)(2)(A), struck subsecs. (f), (g), and (h). Before being struck, they read as follows:
“(f) Rules Relating To Specified Liability Loss.—For purposes of this section—
“(1) In General.—The term “specified liability loss” means the sum of the following amounts to the extent taken into account in computing the net operating loss for the taxable year:
“(A) Any amount allowable as a deduction under section 162 or 165 which is attributable to—
“(i) product liability, or
“(ii) expenses incurred in the investigation or settlement of, or opposition to, claims against the taxpayer on account of product liability.
“(B)(i) Any amount allowable as a deduction under this chapter (other than section 468(a)(1) or 468A(a)) which is in satisfaction of a liability under a Federal or State law requiring--
“(I) the reclamation of land,
“(II) the decommissioning of a nuclear power plant (or any unit thereof),
“(III) the dismantlement of a drilling platform,
“(IV) the remediation of environmental contamination, or
“(V) a payment under any workers compensation act (within the meaning of section 461(h)(2)(C)(i)).
“(ii) A liability shall be taken into account under this subparagraph only if—
“(I) the act (or failure to act) giving rise to such liability occurs at least 3 years before the beginning of the taxable year, and
“(II) the taxpayer used an accrual method of accounting throughout the period or periods during which such act (or failure to act) occurred.
“(2) Limitation.—The amount of the specified liability loss for any taxable year shall not exceed the amount of the net operating loss for such taxable year.
“(3) Special Rule For Nuclear Powerplants.—Except as provided in regulations prescribed by the Secretary, that portion of a specified liability loss which is attributable to amounts incurred in the decommissioning of a nuclear powerplant (or any unit thereof) may, for purposes of subsection (b)(1)(C), be carried back to each of the taxable years during the period—
“(A) beginning with the taxable year in which such plant (or unit thereof) was placed in service, and
“(B) ending with the taxable year preceding the loss year.
“(4) Product Liability.—The term “product liability” means—
“(A) liability of the taxpayer for damages on account of physical injury or emotional harm to individuals, or damage to or loss of the use of property, on account of any defect in any product which is manufactured, leased, or sold by the taxpayer, but only if
“(B) such injury, harm, or damage arises after the taxpayer has completed or terminated operations with respect to, and has relinquished possession of, such product.
“(5) Coordination With Subsection (b)(2).—For purposes of applying subsection (b)(2), a specified liability loss for any taxable year shall be treated as a separate net operating loss for such taxable year to be taken into account after the remaining portion of the net operating loss for such taxable year.
“(6) Election.—Any taxpayer entitled to a 10-year carryback under subsection (b)(1)(C) from any loss year may elect to have the carryback period with respect to such loss year determined without regard to subsection (b)(1)(C). Such election shall be made in such manner as may be prescribed by the Secretary and shall be made by the due date (including extensions of time) for filing the taxpayer's return for the taxable year of the net operating loss. Such election, once made for any taxable year, shall be irrevocable for that taxable year.
“(g) Corporate Equity Reduction Interest Losses.—For purposes of this section—
“(1) In General.—The term “corporate equity reduction interest loss” means, with respect to any loss limitation year, the excess (if any) of—
“(A) the net operating loss for such taxable year, over
“(B) the net operating loss for such taxable year determined without regard to any allocable interest deductions otherwise taken into account in computing such loss.
“(2) Allocable Interest Deductions
“(A) In General.—The term “allocable interest deductions” means deductions allowed under this chapter for interest on the portion of any indebtedness allocable to a corporate equity reduction transaction.
“(B) Method Of Allocation.—Except as provided in regulations and subparagraph (E), indebtedness shall be allocated to a corporate equity reduction transaction in the manner prescribed under clause (ii) of section 263A(f)(2)(A) (without regard to clause (i) thereof).
“(C) Allocable Deductions Not To Exceed Interest Increases.—Allocable interest deductions for any loss limitation year shall not exceed the excess (if any) of—
“(i) the amount allowable as a deduction for interest paid or accrued by the taxpayer during the loss limitation year, over
“(ii) the average of such amounts for the 3 taxable years preceding the taxable year in which the corporate equity reduction transaction occurred.
“(D) De Minimis Rule.—A taxpayer shall be treated as having no allocable interest deductions for any taxable year if the amount of such deductions (without regard to this subparagraph) is less than $1,000,000.
“(E) Special Rule For Certain Unforeseeable Events.—If an unforeseeable extraordinary adverse event occurs during a loss limitation year but after the corporate equity reduction transaction—
“(i) indebtedness shall be allocated in the manner described in subparagraph (B) to unreimbursed costs paid or incurred in connection with such event before being allocated to the corporate equity reduction transaction, and
“(ii) the amount determined under subparagraph (C)(i) shall be reduced by the amount of interest on indebtedness described in clause (i).
“(3) Corporate Equity Reduction Transaction
“(A) In General.—The term ”corporate equity reduction transaction” means—
“(i) a major stock acquisition, or
“(ii) an excess distribution.
“(B) Major Stock Acquisition
“(i) In General.—The term “major stock acquisition” means the acquisition by a corporation pursuant to a plan of such corporation (or any group of persons acting in concert with such corporation) of stock in another corporation representing 50 percent or more (by vote or value) of the stock in such other corporation.
“(ii) Exception.—The term “major stock acquisition” does not include a qualified stock purchase (within the meaning of section 338) to which an election under section 338 applies.
“(C) Excess Distribution.—The term “excess distribution” means the excess (if any) of—
“(i) the aggregate distributions (including redemptions) made during a taxable year by a corporation with respect to its stock, over
“(ii) the greater of—
“(I) 150 percent of the average of such distributions during the 3 taxable years immediately preceding such taxable year, or
“(II) 10 percent of the fair market value of the stock of such corporation as of the beginning of such taxable year.
“(D) Rules For Applying Subparagraph (B).—For purposes of subparagraph (B)—
“(i) Plans To Acquire Stock.—All plans referred to in subparagraph (B) by any corporation (or group of persons acting in concert with such corporation) with respect to another corporation shall be treated as 1 plan.
“(ii) Acquisitions During 24-Month Period.—All acquisitions during any 24-month period shall be treated as pursuant to 1 plan.
“(E) Rules For Applying Subparagraph (C).—For purposes of subparagraph (C)—
“(i) Certain Preferred Stock Disregarded.—Stock described in section 1504(a)(4), and distributions (including redemptions) with respect to such stock, shall be disregarded.
“(ii) Issuance Of Stock.—The amounts determined under clauses (i) and (ii)(I) of subparagraph (C) shall be reduced by the aggregate amount of stock issued by the corporation during the applicable period in exchange for money or property other than stock in the corporation.
“(4) Other Rules
“(A) Ordering Rule.—For purposes of paragraph (1), in determining the allocable interest deductions taken into account in computing the net operating loss for any taxable year, taxable income for such taxable year shall be treated as having been computed by taking allocable interest deductions into account after all other deductions.
“(B) Coordination With Subsection (b)(2).—For purposes of subsection (b)(2)—
“(i) a corporate equity reduction interest loss shall be treated in a manner similar to the manner in which a specified liability loss is treated, and
“(ii) in determining the net operating loss deduction for any prior taxable year referred to in the 3rd sentence of subsection (b)(2), the portion of any net operating loss which may not be carried to such taxable year under subsection (b)(1)(D) shall not be taken into account.
“(C) Members Of Affiliated Groups.—Except as provided by regulations, all members of an affiliated group filing a consolidated return under section 1501 shall be treated as 1 taxpayer for purposes of this subsection and subsection (b)(1)(D).
“(5) Regulations.—The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations—
“(A) for applying this subsection to successor corporations and in cases where a taxpayer becomes, or ceases to be, a member of an affiliated group filing a consolidated return under section 1501,
“(B) to prevent the avoidance of this subsection through related parties, pass-through entities, and intermediaries, and
“(C) for applying this subsection where more than 1 corporation is involved in a corporate equity reduction transaction.”
“(h) Rules Relating To Farming Losses.—For purposes of this section—
“(1) In General.—The term “farming loss” means the lesser of—
“(A) the amount which would be the net operating loss for the taxable year if only income and deductions attributable to farming businesses (as defined in section 263A(e)(4)) are taken into account, or
“(B) the amount of the net operating loss for such taxable year.
“(2) Coordination With Subsection (b)(2).—For purposes of applying subsection (b)(2), a farming loss for any taxable year shall be treated in a manner similar to the manner in which a specified liability loss is treated.
“(3) Election.—Any taxpayer entitled to a 5-year carryback under subsection (b)(1)(F) from any loss year may elect to have the carryback period with respect to such loss year determined without regard to subsection (b)(1)(F). Such election shall be made in such manner as may be prescribed by the Secretary and shall be made by the due date (including extensions of time) for filing the taxpayer's return for the taxable year of the net operating loss. Such election, once made for any taxable year, shall be irrevocable for such taxable year.”
Subsec. (i). Pub. L. 115-97, Sec. 13302(c)(2)(A), 13302(d)(2), redesignated subsec. (i) and subsec. (f) and then redesignated subsec. (f) as subsec. (g).
Subsec. (f). Pub. L. 115-97, Sec. 13302(d)(2), added a new subsec. (f).
2014 - Subsec. (b)(1)(D)-(G). Pub. L. 113-295, Div. A, Sec. 221(a)(30)(A)(i), amended par. (1) by striking subpar. (D) and by redesignating subpar. (E)-(G) as subpar. (D)-(F). Before being struck, subpar. (D) read as follows:
“(D) Bad Debt Losses Of Commercial Banks.—In the case of any bank (as defined in section 585(a)(2)), the portion of the net operating loss for any taxable year beginning after December 31, 1986, and before January 1, 1994, which is attributable to the deduction allowed under section 166(a) shall be a net operating loss carryback to each of the 10 taxable years preceding the taxable year of the loss and a net operating loss carryover to each of the 5 taxable years following the taxable year of such loss.”
Subsec. (b)(1)(D)(i)(II). Pub. L. 113-295, Div. A, Sec. 221(a)(30)(B)(i), amended subclause (II) by striking “ending after August 2, 1989”.
Subsec. (b)(1)(D)(ii). Pub. L. 113-295, Div. A, Sec. 221(a)(30)(B)(ii), amended clause (ii) by substituting “subsection (g)” for “subsection (h)”.
Subsec. (b)(1)(E)(ii). Pub. L. 113-295, Div. A, Sec. 221(a)(30)(B)(iv), amended clause (iv) by substituting “subsection (h)” for “subsection (i)” in the last sentence.
Subsec. (b)(1)(E)(ii)(II). Pub. L. 113-295, Div. A, Sec. 221(a)(30)(B)(iii), amended subclause (II) by substituting “section 165(i)(5)” for “section 165(h)(3)(C)(i)”.
Subsec. (b)(1)(F)(ii)(II). Pub. L. 113-295, Div. A, Sec. 211(c)(1)(B), amended subclause (II) by substituting “section 165(h)(3)(C)(i)” for “subsection (h)(3)(C)(i)”.
Subsec. (b)(1)(F). Pub. L. 113-295, Div. A, Sec. 221(a)(30)(B)(v), amended subpar. (F), as redesignated, by substituting “subsection (h) for “subsection (i)”.
Subsec. (b)(1)(H)-(J). Pub. L. 113-295, Div. A, Sec. 221(a)(30)(A)(i), amended par. (1) by striking subpar. (H), (I), and (J). Before being struck, subpar. (H), (I), and (J) read as follows:
“(H) Carryback For 2008 Or 2009 Net Operating Losses.—
“(i) In General.—In the case of an applicable net operating loss with respect to which the taxpayer has elected the application of this subparagraph—
“(I) subparagraph (A)(i) shall be applied by substituting any whole number elected by the taxpayer which is more than 2 and less than 6 for “2”,
“(II) subparagraph (E)(ii) shall be applied by substituting the whole number which is one less than the whole number substituted under subclause (I) for “2”, and
“(ii) Applicable Net Operating Loss.—For purposes of this subparagraph, the term “applicable net operating loss” means the taxpayer's net operating loss for a taxable year ending after December 31, 2007, and beginning before January 1, 2010.
“(iii) Election.—
“(I) In General.—Any election under this subparagraph may be made only with respect to 1 taxable year.
“(II) Procedure.—Any election under this subparagraph shall be made in such manner as may be prescribed by the Secretary, and shall be made by the due date (including extension of time) for filing the return for the taxpayer's last taxable year beginning in 2009. Any such election, once made, shall be irrevocable.
“(iv) Limitation On Amount Of Loss Carryback To 5th Preceding Taxable Year.—
“(I) In General.—The amount of any net operating loss which may be carried back to the 5th taxable year preceding the taxable year of such loss under clause (i) shall not exceed 50 percent of the taxpayer's taxable income (computed without regard to the net operating loss for the loss year or any taxable year thereafter) for such preceding taxable year.
“(II) Carrybacks And Carryovers To Other Taxable Years.—Appropriate adjustments in the application of the second sentence of paragraph (2) shall be made to take into account the limitation of subclause (I).
“(III) Exception For 2008 Elections By Small Businesses.—Subclause (I) shall not apply to any loss of an eligible small business with respect to any election made under this subparagraph as in effect on the day before the date of the enactment of the Worker, Homeownership, and Business Assistance Act of 2009.
“(v) Special Rules For Small Business.—
“(I) In General.—In the case of an eligible small business which made or makes an election under this subparagraph as in effect on the day before the date of the enactment of the Worker, Homeownership, and Business Assistance Act of 2009, clause (iii)(I) shall be applied by substituting “2 taxable years” for “1 taxable year”.
“(II) Eligible Small Business.—For purposes of this subparagraph, the term “eligible small business” has the meaning given such term by subparagraph (F)(iii), except that in applying such subparagraph, section 448(c) shall be applied by substituting “$15,000,000” for “$5,000,000” each place it appears.”
“(I) Transmission Property And Pollution Control Investment.—
“(i) In General.—At the election of the taxpayer for any taxable year ending after December 31, 2005, and before January 1, 2009, in the case of a net operating loss for a taxable year ending after December 31, 2002, and before January 1, 2006, there shall be a net operating loss carryback to each of the 5 taxable years preceding the taxable year of such loss to the extent that such loss does not exceed 20 percent of the sum of the electric transmission property capital expenditures and the pollution control facility capital expenditures of the taxpayer for the taxable year preceding the taxable year for which such election is made.
“(ii) Limitations.—For purposes of this subsection—
“(I) not more than one election may be made under clause (i) with respect to any net operating loss for a taxable year, and
“(II) an election may not be made under clause (i) for more than 1 taxable year beginning in any calendar year.
“(iii) Coordination With Ordering Rule.—For purposes of applying subsection (b)(2), the portion of any loss which is carried back 5 years by reason of clause (i) shall be treated in a manner similar to the manner in which a specified liability loss is treated.
“(iv) Special Rules Relating To Credit Or Refund.—In the case of the portion of the loss which is carried back 5 years by reason of clause (i)—
“(I) an application under section 6411(a) with respect to such portion shall not fail to be treated as timely filed if filed within 24 months after the due date specified under such section, and
“(II) references in sections 6501(h), 6511(d)(2)(A), and 6611(f)(1) to the taxable year in which such net operating loss arises or results in a net operating loss carryback shall be treated as references to the taxable year for which such election is made.
“(v) Definitions.—For purposes of this subparagraph—
“(I) Electric Transmission Property Capital Expenditures.—The term “electric transmission property capital expenditures” means any expenditure, chargeable to capital account, made by the taxpayer which is attributable to electric transmission property used by the taxpayer in the transmission at 69 or more kilovolts of electricity for sale. Such term shall not include any expenditure which may be refunded or the purpose of which may be modified at the option of the taxpayer so as to cease to be treated as an expenditure within the meaning of such term.
“(II) Pollution Control Facility Capital Expenditures.—The term “pollution control facility capital expenditures” means any expenditure, chargeable to capital account, made by an electric utility company (as defined in section 2(3) of the Public Utility Holding Company Act (15 U.S.C. 79b(3)), as in effect on the day before the date of the enactment of the Energy Tax Incentives Act of 2005) which is attributable to a facility which will qualify as a certified pollution control facility as determined under section 169(d)(1) by striking “before January 1, 1976,” and by substituting “an identifiable” for “a new identifiable”. Such term shall not include any expenditure which may be refunded or the purpose of which may be modified at the option of the taxpayer so as to cease to be treated as an expenditure within the meaning of such term.”
“(J) Certain Losses Attributable Federally Declared Disasters.—In the case of a taxpayer who has a qualified disaster loss (as defined in subsection (j)), such loss shall be a net operating loss carryback to each of the 5 taxable years preceding the taxable year of such loss.”
Subsec. (d)(5). Pub. L. 113-295, Div. A, Sec. 221(a)(41)(B), amended par. (5). Before amendment, it read as follows:
“(5) Computation Of Deduction For Dividends Received, Etc.—The deductions allowed by sections 243 (relating to dividends received by corporations), 244 (relating to dividends received on certain preferred stock of public utilities), and 245 (relating to dividends received from certain foreign corporations) shall be computed without regard to section 246(b) (relating to limitation on aggregate amount of deductions); and the deduction allowed by section 247 (relating to dividends paid on certain preferred stock of public utilities) shall be computed without regard to subsection (a)(1)(B) of such section.”
Subsec. (g)-(i). Pub. L. 113-295, Div. A, Sec. 221(a)(30)(A)(ii), struck subsec. (g) and redesignated subsec. (h)-(i) as subsec. (g)-(h). Before being struck, subsec. (g) read as follows:
“(g) Rules Relating To Bad Debt Losses Of Commercial Banks.—For purposes of this section—
“(1) Portion Attributable To Deduction For Bad Debts.—The portion of the net operating loss for any taxable year which is attributable to the deduction allowed under section 166(a) shall be the excess of—
“(i) the net operating loss for such taxable year, over
“(ii) the net operating loss for such taxable year determined without regard to the amount allowed as a deduction under section 166(a) for such taxable year.
“(2) Coordination With Subsection (b)(2).—For purposes of subsection (b)(2), the portion of a net operating loss for any taxable year which is attributable to the deduction allowed under section 166(a) shall be treated in a manner similar to the manner in which a specified liability loss is treated.”
Subsec. (g)(2)(F). Pub. L. 113-295, Div. A, Sec. 221(a)(30)(B)(vi), amended par. (2) by striking subpar. (F). Before being struck, it read as follows:
“(F) Transition Rule.—If any of the 3 taxable years described in subparagraph (C)(ii) end on or before August 2, 1989, the taxpayer may substitute for the amount determined under such subparagraph an amount equal to the interest paid or accrued (determined on an annualized basis) during the taxpayer's taxable year which includes August 3, 1989, on indebtedness of the taxpayer outstanding on August 2, 1989.”
Subsec. (g)(4). Pub. L. 113-295, Div. A, Sec. 221(a)(30)(B)(vii), amended par. (4) by substituting “subsection (b)(1)(D)” for “subsection (b)(1)(E)” each place it appeared.
Subsec. (h)(1). Pub. L. 113-295, Div. A, Sec. 221(a)(30)(B)(viii), amended subsec. (h)(1), as redesignated, by striking the last sentence. Before being struck, it read as follows: “Such term shall not include any qualified disaster loss (as defined in subsection (j)).”
Subsec. (h)(3). Pub. L. 113-295, Div. A, Sec. 221(a)(30)(B)(ix), amended par. (3) by substituting “subsection (b)(1)(F)” for “subsection (b)(1)(G)”.
Subsec. (j). Pub. L. 113-295, Div. A, Sec. 221(a)(30)(A)(ii), struck subsec. (j). Before being struck, it read as follows:
“(j) Rules Relating To Qualified Disaster Losses.—For purposes of this section—
“(1) In General.—The term “qualified disaster loss” means the lesser of—
“(i) the losses allowable under section 165
“(I) attributable to a federally declared disaster (as defined in section 165(h)(3)(C)(i)) occurring before January 1, 2010, and
“(II) occurring in a disaster area (as defined in section 165(h)(3)(C)(ii)), and
“(2) Coordination With Subsection (b)(2).—For purposes of applying subsection (b)(2), a qualified disaster loss for any taxable year shall be treated in a manner similar to the manner in which a specified liability loss is treated. Print Share document link
“(3) Election.—Any taxpayer entitled to a 5-year carryback under subsection (b)(1)(J) from any loss year may elect to have the carryback period with respect to such loss year determined without regard to subsection (b)(1)(J). Such election shall be made in such manner as may be prescribed by the Secretary and shall be made by the due date (including extensions of time) for filing the taxpayer's return for the taxable year of the net operating loss. Such election, once made for any taxable year, shall be irrevocable for such taxable year.
“(4) Exclusion.—The term “qualified disaster loss” shall not include any loss with respect to any property described in section 1400N(p)(3).”
Subsec. (k). Pub. L. 113-295, Div. A, Sec. 221(a)(30)(A)(ii), redesignated subsec. (k) as subsec. (i).
2009 - Subsec. (b)(1)(H). Pub. L. 111-92, Sec. 13(a), amended subpar. (H). Before amendment, it read as follows:
“(H) Carryback For 2008 Net Operating Losses Of Small Businesses
“ (i) In General.—If an eligible small business elects the application of this subparagraph with respect to an applicable 2008 net operating loss—
“(ii) Applicable 2008 Net Operating Loss.—For purposes of this subparagraph, the term “applicable 2008 net operating loss” means—
“(I) the taxpayer's net operating loss for any taxable year ending in 2008, or
“(II) if the taxpayer elects to have this subclause apply in lieu of subclause (I), the taxpayer's net operating loss for any taxable year beginning in 2008.
“(iii) Election.—Any election under this subparagraph shall be made in such manner as may be prescribed by the Secretary, and shall be made by the due date (including extension of time) for filing the taxpayer's return for the taxable year of the net operating loss. Any such election, once made, shall be irrevocable. Any election under this subparagraph may be made only with respect to 1 taxable year.
“(iv) Eligible Small Business.—For purposes of this subparagraph, the term “eligible small business” has the meaning given such term by subparagraph (F) (iii), except that in applying such subparagraph, section 448(c) shall be applied by substituting “$15,000,000” for “$5,000,000” each place it appears.”
Subsec. (b)(1)(H). Pub. L. 111-5, Div. B, Sec. 1211(a), amended subpar. (H). Before amendment, it read as follows:
“(H) In the case of a net operating loss for any taxable year ending during 2001 or 2002, subparagraph (A)(i) shall be applied by substituting “5” for “2” and subparagraph (F) shall not apply.”
Subsec. (k)-(l). Pub. L. 111-5, Div. B, Sec. 1211(b), struck subsec. (k) and redesignated subsec. (l) as subsec. (k). Before being struck, subsec. (k) read as follows:
“(k) Election To Disregard 5-Year Carryback For Certain Net Operating Losses.— Any taxpayer entitled to a 5-year carryback under subsection (b)(1)(H) from any loss year may elect to have the carryback period with respect to such loss year determined without regard to subsection (b)(1)(H). Such election shall be made in such manner as may be prescribed by the Secretary and shall be made by the due date (including extensions of time) for filing the taxpayer's return for the taxable year of the net operating loss. Such election, once made for any taxable year, shall be irrevocable for such taxable year.”
2008 - Subsec. (b)(1)(F)(ii). Pub. L. 110-343, Div. C, Sec. 708(d)(1), amended clause (ii) by inserting “or qualified disaster loss (as defined in subsection (j))” before the period at the end.
Subsec. (b)(1)(F)(ii)(II). Pub. L. 110-343, Div. C, Sec. 706(a)(2)(D)(v), amended subclause (II) by substituting “federally declared disasters (as defined by subsection (h)(3)(C)(i))” for “Presidentially declared disasters (as defined in section 1033(h)(3))”.
Subsec. (b)(1)(F)(ii)(III). Pub. L. 110-343, Div. C, Sec. 706(a)(2)(D)(vi), amended clause (vi) by substituting “federally declared disasters” for “Presidentially declared disasters”.
Subsec. (b)(1)(J). Pub. L. 110-343, Div. C, Sec. 708(a), amended par. (1) by adding subpar. (J).
Subsec. (i)(1). Pub. L. 110-343, Div. C, Sec. 708(d)(2), amended par. (1) by adding the flush sentence at the end.
Subsec. (j)-(l). Pub. L. 110-343, Div. C, Sec. 708(b), redesignated subsec. (j) and (k) as subsec, (k) and (l), respectively, and added subsec. (j).
2005 - Subsec. (b)(1)(I)(i). Pub. L. 109-135, Sec. 402(f)(1), amended clause (i). Before amendment, it read as follows:
“At the election of the taxpayer in any taxable year ending after December 31, 2005, and before January 1, 2009, in the case of a net operating loss in a taxable year ending after December 31, 2002, and before January 1, 2006, there shall be a net operating loss carryback to each of the 5 years preceding the taxable year of such loss to the extent that such loss does not exceed 20 percent of the sum of electric transmission property capital expenditures and pollution control facility capital expenditures of the taxpayer for the taxable year preceding the taxable year in which such election is made.”
Subsec. (b)(1)(I)(ii). Pub. L. 109-135, Sec. 402(f)(2), amended clause (ii) by substituting “for a taxable year” for “in a taxable year”.
Subsec. (b)(1)(I)(iv)-(vi). Pub. L. 109-135, Sec. 402(f)(3), amended subpar. (I) by striking clauses (iv) and (v); by adding a new clause (iv); and by redesignating clause (vi) as clause (v). Before being struck, clauses (iv) and (v) read as follows:
“(iv) APPLICATION FOR ADJUSTMENT
“In the case of any portion of a net operating loss to which an election under clause (i) applies, an application under section 6411(a) with respect to such loss shall not fail to be treated as timely filed if filed within 24 months after the due date specified under such section.
“(v) SPECIAL RULES RELATING TO REFUND
“For purposes of a net operating loss to which an election under clause (i) applies, references in sections 6501(h), 6511(d)(2)(A), and 6611(f)(1) to the taxable year in which such net operating loss arises or result in a net loss carryback shall be treated as references to the taxable year in which such election occurs.”
Subsec. (d)(7). Pub. L. 109-135, Sec. 403(a)(17), added par. (7).
Subsec. (b)(1)(I). Pub. L. 109-58, Sec. 1311, added subpar. (I).
2004 - Subsec. (b)(1)(H). Pub. L. 108-311, Sec. 403(b)(1), amended subpar. (H) by striking “a taxpayer which has” after “In the case of”.
2002 - Subsec. (b)(1)(F)(i). Pub. L. 107-147, Sec. 417(8), amended clause (i) by substituting “3 taxable years” for “3 years" and “2 taxable years” for “2 years”.
Subsec. (b)(1)(H). Pub. L. 107-147, Sec. 102(a), added subpar. (H).
Subsec. (j). Pub. L. 107-147, Sec. 102(b), redesignated subsec. (j) as subsec. (k) and added a new subsec. (j).
1998 - Subsec. (b)(1)(F). Pub. L. 105-277, Sec. 2013(c), amended clause (ii) by adding the flush sentence at the end.
Subsec. (b)(1)(F).Pub. L. 105-277, Sec. 4003(h), added clause (iv).
Subsec. (b)(1)(G). Pub. L. 105-277, Sec. 2013(a), added subpar. (G).
Subsec. (d)(4)(C). Pub. L. 105-277, Sec. 4004(a), amended subpar. (C). Prior to amendment it read as follows:
“(C) any deduction allowable under section 165(c)(3) (relating to casualty losses) shall not be taken into account; and”.
Subsec. (f)(1)(B). Pub. L. 105-277, Sec. 3004(a), amended subpar. (B). Prior to amendment it read as follows:
“(B) Any amount (not described in subparagraph (A)) allowable as a deduction under this chapter with respect to a liability which arises under a Federal or State law or out of any tort of the taxpayer if--
“(i) in the case of a liability arising out of a Federal or State law, the act (or failure to act) giving rise to such liability occurs at least 3 years before the beginning of the taxable year, or
“(ii) in the case of a liability arising out of a tort, such liability arises out of a series of actions (or failures to act) over an extended period of time a substantial portion of which occurs at least 3 years before the beginning of the taxable year.
A liability shall not be taken into account under subparagraph (B) unless the taxpayer used an accrual method of accounting throughout the period or periods during which the acts or failures to act giving rise to such liability occurred.”
Subsec. (i). Pub. L. 105-277, Sec. 2013(b), redesignated subsec. (i) as subsec. (j) and added a new subsec. (i).
1997 - Subsec. (b)(1)(A). Pub. L. 105-34, Sec. 1082(a), amended clause (i) by substituting “2” for “3”, and amended clause (ii) by substituting “20” for “15”.
Subsec. (b)(1)(F). Pub. L. 105-34, Sec. 1082(b), added subpar. (F).
1996 - Subsec. (b). Pub. L. 104-188, Sec. 1702(h)(2) substituted ‘subsection (h)’ for ‘subsection (m)’.
Subsec. (h)(3)(B)(i). Pub. L. 104-188, Sec. 1704(t)(5) replaced the comma at the end with a period.
Subsec. (h)(4)(C). Pub. L. 104-188, Sec. 1702(h)(16) substituted ‘subsection (b)(1)(E)’ for ‘subsection (b)(1)(M)’.
1993 - Subsec. (d)(2). Pub. L. 103-66, Sec. 13113(d)(1)(A), amended par. (2). Before amendment it read as follows:
“(2) Capital gains and losses of taxpayers other than corporations
“In the case of a taxpayer other than a corporation, the amount deductible on account of losses from sales or exchanges of capital assets shall not exceed the amount includible on account of gains from sales or exchanges of capital assets.”
Subsec. (d)(4)(B). Pub. L. 103-66, Sec. 13113(d)(1)(A), amended subpar. (B) by inserting “, (2)(B),” after “paragraph (1)”.
1990 - Subsec. (b). Pub. L. 101-508, Sec. 11811(a), amended subsec. (b) generally, substituting present provisions for provisions delineating years to which loss may be carried, relating to amount of carrybacks and carryovers, and providing for special rules for foreign expropriation losses.
Subsec. (b)(1)(M)(iii). Pub. L. 101-508, Sec. 11701(d), struck out ‘a C corporation’ after ‘means’ in introductory provisions, substituted ‘a C corporation which acquires’ for ‘which acquires’ in subcl. (I), ‘a C corporation’ for ‘a corporation’ in subcl. (II), and ‘any C corporation which is a successor’ for ‘any successor corporation’ in subcl. (III).
Subsec. (f). Pub. L. 101-508, Sec. 11811(b)(1), (2)(A), redesignated subsec. (j) as (f), substituted heading for one which read: ‘Rules relating to product liability losses’, and amended text generally, substituting present provisions for provisions defining terms ‘product liability loss’ and ‘product liability’, and providing for an election with respect to carrybacks of such losses.
Subsec. (g). Pub. L. 101-508, Sec. 11811(b)(1), redesignated subsec. (l) as (g) and struck out former subsec. (g) which related to carryover of net operating losses for certain regulated transportation corporations.
Subsec. (g)(2). Pub. L. 101-508, Sec. 11811(b)(3), amended par. (2) generally. Prior to amendment, par. (2) read as follows: ‘In applying paragraph (2) of subsection (b), the portion of the net operating loss for any taxable year which is attributable to the deduction allowed under section 166(a) shall be treated in a manner similar to the manner in which a foreign expropriation loss is treated.’
Subsec. (h). Pub. L. 101-508, Sec. 11811(b)(1), redesignated subsec. (m) as (h) and struck out former subsec. (h) which defined ‘foreign expropriation loss’.
Subsec. (h)(3)(B)(ii). Pub. L. 101-508, Sec. 11324(a), in par. (3)(B)(ii), formerly subsec. (m)(3)(B)(ii), substituted heading for one which read: ‘Exceptions’ and amended text generally. Prior to amendment, text read as follows: ‘The term ‘major stock acquisition’ shall not include -
‘(I) a qualified stock purchase (within the meaning of section 338) to which an election under section 338 applies, or
‘(II) except as provided in regulations, an acquisition in which a corporation acquires stock of another corporation which, immediately before the acquisition, was a member of an affiliated group (within the meaning of section 1504(a)) other than the common parent of such group.’
Subsec. (h)(4)(B). Pub. L. 101-508, Sec. 11811(b)(4), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: ‘In applying paragraph (2) of subsection (b), the corporate equity reduction interest loss shall be treated in a manner similar to the manner in which a foreign expropriation loss is treated.’
Pub. L. 101-508, Sec. 11704(a)(2), substituted ‘subsection (b)(2)’ for ‘subsection (B)(2)’ in heading.
Subsec. (i). Pub. L. 101-508, Sec. 11811(b)(1), redesignated subsec. (n) as (i) and struck out former subsec. (i) which provided for rules relating to mortgage disposition losses of the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.
Subsec. (j). Pub. L. 101-508, Sec. 11811(b)(1), redesignated subsec. (j) as (f).
Subsec. (k). Pub. L. 101-508, Sec. 11811(b)(1), struck out subsec. (k) which related to definitions and special rules relating to deferred statutory or tort liability losses.
Subsecs. (l) to (n). Pub. L. 101-508, Sec. 11811(b)(1), redesignated subsecs. (l) to (n) as (g) to (i), respectively.
1989 - Subsec. (b)(1)(M). Pub. L. 101-239, Sec. 7211(a), added subpar. (M).
Subsecs. (m), (n). Pub. L. 101-239, Sec. 7211(b), added subsec. (m) and redesignated former subsec. (m) as (n).
1988 - Subsec. (b)(1)(A). Pub. L. 100-647, Sec. 1009(c)(2), substituted ‘Except as otherwise provided in this paragraph, a net operating loss’ for ‘Except as provided in subparagraphs (D), (E), (F), (G), (H), (I), (J), (K), (L), and (M), a net operating loss’.
Subsec. (b)(1)(B). Pub. L. 100-647, Sec. 1009(c)(3), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: ‘Except as provided in subparagraphs (C), (D), and (E), a net operating loss for any taxable year ending after December 31, 1955, shall be a net operating loss carryover to each of the 5 taxable years following the taxable year of such loss. Except as provided in subparagraphs (C), (D), (E), (F), (G), (H), (J), (L), and (M), a net operating loss for any taxable year ending after December 31, 1975, shall be a net operating loss carryover to each of the 15 taxable years following the taxable year of such loss.’
Subsec. (b)(1)(K) to (M). Pub. L. 100-647, Sec. 1009(c)(1), redesignated subpars. (L) and (M) as (K) and (L), respectively.
Subsec. (d)(4)(B). Pub. L. 100-647, Sec. 1003(a)(1), substituted ‘paragraphs (1) and (3)’ for ‘paragraphs (1), (2)(B), and (3)’.
1986 - Subsec. (b)(1)(A), (B). Pub. L. 99-514, Sec. 903(b)(2)(A), (B), inserted reference to subpars. (L) and (M).
Subsec. (b)(1)(F). Pub. L. 99-514, Sec. 903(a)(1), inserted ‘and before January 1, 1987,’.
Pub. L. 99-514, Sec. 901(d)(4)(B), substituted ‘referred to in section 582(c)(5)’ for ‘to which section 585, 586, or 593 applies’.
Subsec. (b)(1)(G). Pub. L. 99-514, Sec. 903(a)(2), inserted ‘and before January 1, 1987,’.
Subsec. (b)(1)(H). Pub. L. 99-514, Sec. 903(a)(3)(A), struck out ‘after December 31, 1981,’ and inserted ‘after December 31, 1981, and before January 1, 1987,’.
Pub. L. 99-514, Sec. 903(a)(3)(B), which directed that subpar. (H) be amended by striking out ‘after December 31, 1984,’ and inserting ‘after December 31, 1984, and before January 1, 1987,’, was executed by striking out ‘after December 31, 1984’ and inserting ‘after December 31, 1984, and before January 1, 1987’, to reflect the probable intent of Congress and the fact that no comma appeared after ‘1984’ and was not necessary after ‘1987’.
Subsec. (b)(1)(J), (K). Pub. L. 99-514, Sec. 1303(b)(1), redesignated subpar. (K) as (J) and struck out former subpar. (J) which read as follows: ‘In the case of an electing GSOC which has a net operating loss for any taxable year such loss shall not be a net operating loss carryback to any taxable year preceding the year of such loss, but shall be a net operating loss carryover to each of the 10 taxable years following the year of such loss.’
Subsec. (b)(1)(L), (M). Pub. L. 99-514, Sec. 903(b)(1), added subpars. (L) and (M).
Subsec. (d)(2). Pub. L. 99-514, Sec. 301(b)(3), amended par. (2) generally. Prior to amendment, par. (2) read as follows: ‘In the case of a taxpayer other than a corporation -
‘(A) the amount deductible on account of losses from sales or exchanges of capital assets shall not exceed the amount includible on account of gains from sales or exchanges of capital assets; and
‘(B) the deduction for long-term capital gains provided by section 1202 shall not be allowed.’
Subsec. (d)(6). Pub. L. 99-514, Sec. 1899A(6), added heading.
Subsec. (d)(7). Pub. L. 99-514, Sec. 104(b)(4), struck out par. (7), zero bracket amount, which read as follows: ‘In the case of a taxpayer other than a corporation, the zero bracket amount shall be treated as a deduction allowed by this chapter. For purposes of subsection (c) -
‘(A) the deduction provided by the preceding sentence shall be in lieu of any itemized deductions of the taxpayer, and
‘(B) such sentence shall not apply to an individual who elects to itemize deductions.’
Subsec. (k)(2), (4). Pub. L. 99-514, Sec. 1303(b)(2), substituted ‘subsection (b)(1)(J)’ for ‘subsection (b)(1)(K)’.
Subsecs. (l), (m). Pub. L. 99-514, Sec. 903(b)(2)(C), added subsec. (l) and redesignated former subsec. (l) as (m).
1984 - Subsec. (b)(1)(A). Pub. L. 98-369, Sec. 91(d)(3)(A), substituted ‘(J), and (K)’ for ‘and (J)’.
Subsec. (b)(1)(H). Pub. L. 98-369, Sec. 177(c)(1)(A), inserted ‘, or a net operating loss of the Federal Home Loan Mortgage Corporation for any taxable year beginning after December 31, 1984’ in introductory provisions.
Subsec. (b)(1)(H)(i), (ii). Pub. L. 98-369, Sec. 177(c)(1)(B), (C), struck out ‘FNMA’ before ‘mortgage disposition loss’.
Subsec. (b)(1)(K). Pub. L. 98-369, Sec. 91(d)(1), added subpar. (K).
Subsec. (b)(2)(A). Pub. L. 98-369, Sec. 722(a)(4)(A), substituted ‘and (5)’ for ‘and (6)’.
Subsec. (d)(4)(D). Pub. L. 98-369, Sec. 491(d)(5), struck out ‘or section 405(c)’ after ‘section 404’.
Subsec. (d)(6) to (8). Pub. L. 98-369, Sec. 722(a)(4)(B), redesignated pars. (7) and (8) as (6) and (7), respectively.
Subsec. (h). Pub. L. 98-369, Sec. 91(d)(3)(B), substituted ‘this section’ for ‘subsection (b)’ in introductory provisions.
Subsec. (i). Pub. L. 98-369, Sec. 177(c)(2), substituted ‘Mortgage disposition loss of the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation’ for ‘FNMA mortgage disposition loss’ in heading and struck out ‘FNMA’ before ‘mortgage disposition loss’ wherever appearing in text.
Subsec. (j). Pub. L. 98-369, Sec. 91(d)(3)(B), substituted ‘this section’ for ‘subsection (b)’ in introductory provisions.
Subsecs. (k), (l). Pub. L. 98-369, Sec. 91(d)(2), added subsec. (k) and redesignated former subsec. (k) as (l).
1982 - Subsec. (b)(1)(A). Pub. L. 97-362, Sec. 102(c)(1), substituted ‘(H), (I), and (J)’ for ‘(H), and (I)’.
Subsec. (b)(1)(B). Pub. L. 97-362, Sec. 102(c)(2), substituted ‘(H), and (J)’ for ‘and (I)’.
Subsec. (b)(1)(H). Pub. L. 97-362, Sec. 102(a), added subpar. (H). Former subpar. (H) redesignated (I).
Subsec. (b)(1)(I). Pub. L. 97-362, Sec. 102(a), (c)(3), redesignated former subpar. (H) as (I) and substituted ‘subsection (j)’ for ‘subsection (i)’. Former subpar. (I) redesignated (J).
Subsec. (b)(1)(J). Pub. L. 97-362, Sec. 102(a), redesignated former subpar. (I) as (J).
Subsec. (f). Pub. L. 97-354 struck out subsec. (f) relating to net operating loss of electing small business corporation.
Subsec. (i). Pub. L. 97-362, Sec. 102(b), added subsec. (i). Former subsec. (i) redesignated (j).
Subsec. (j). Pub. L. 97-362, Sec. 102(b), (c)(4), redesignated former subsec. (i) as (j) and, in par. (3) of subsec. (j) as so redesignated, substituted ‘subsection (b)(1)(I)’ for ‘subsection (b)(1)(H)’ wherever appearing. Former subsec. (j) redesignated (k).
Subsec. (k). Pub. L. 97-362, Sec. 102(b), redesignated former subsec. (j) as (k).
1981 - Subsec. (b)(1)(B). Pub. L. 97-34, Sec. 207(a)(1), substituted ‘15 taxable years’ for ‘7 taxable years’.
Subsec. (b)(1)(C). Pub. L. 97-34, Sec. 207(a)(2)(A), substituted ‘ending after December 31, 1955, and before January 1, 1976, shall’ for ‘ending after December 31, 1955, shall’ and struck out provision that, for any taxable year ending after Dec. 31, 1975, the preceding sentence was to be applied by substituting ‘9 taxable years’ for ‘7 taxable years’.
Subsec. (b)(1)(E)(i)(II). Pub. L. 97-34, Sec. 207(a)(2)(B)(i), substituted ‘15’ for ‘8’.
Subsec. (b)(1)(E)(ii). Pub. L. 97-34, Sec. 207(a)(2)(B)(ii), struck out designation subclause ‘(I)’ for provisions prohibiting a loss carryback to any taxable year which is a REIT year and struck out provision formerly designated as subclause (II) directing that the number of taxable years to which a loss could be a net operating loss carryover under subparagraph (B) be increased (to a number not greater than 8) by the number of taxable years to which such loss could not be a net operating loss carryback by reason of subclause (I).
Subsec. (g)(3)(C). Pub. L. 97-34, Sec. 207(a)(2)(C), struck out subpar. (C) which provided that, in the case of a net operating loss carryover from a loss year ending after Dec. 31, 1975, subpars. (A) and (B) were to be applied by substituting ‘8th taxable year’ for ‘6th taxable year’ and ‘9th taxable year’ for ‘7th taxable year’.
1980 - Subsec. (b)(1)(A). Pub. L. 96-222, Sec. 106(a)(6), substituted ‘, (H), and (I)’ for ‘and (H)’.
Pub. L. 96-222, Sec. 103(a)(15), amended directory language of Pub. L. 95-600, Sec. 371(a)(2), to correct an error, and did not involve any change in text. See 1978 Amendment note for subsec. (b)(1)(A) below.
Subsec. (b)(1)(B). Pub. L. 96-222, Sec. 106(a)(7), substituted ‘(G), and (I)’ for ‘and (G)’.
Subsec. (b)(1)(E). Pub. L. 96-595 generally revised subpar. (E) to permit a trust which was formerly a real estate investment trust an additional year of carryforward of net operating losses for each year it was denied a net operating loss carryback because of its status as a real estate investment trust, and removed the restriction that a net operating loss incurred before 1976 can be carried forward to the 6th, 7th, or 8th year only if it qualified as a real estate investment trust for all years from the loss year through the carryover year.
Subsec. (b)(1)(I). Pub. L. 96-222, Sec. 106(a)(1), redesignated former subpar. (H), added by section 601(b) of Pub. L. 95-600 relating to an electing GSOC, as (I).
1978 - Subsec. (b)(1)(A). Pub. L. 95-600, Sec. 371(a)(2), as amended by Pub. L. 96-222, Sec. 103(a)(15), substituted ‘(G), and (H)’ for ‘and (G)’.
Pub. L. 95-600, Sec. 703(p)(1)(A), struck out provisions relating to net operating loss carryback with respect to a taxable year ending on or after Dec. 31, 1962, for which a certification has been issued under section 317 of the Trade Expansion Act of 1962.
Subsec. (b)(1)(B). Pub. L. 95-600, Sec. 701(d)(1), inserted reference to subpar. (G).
Subsec. (b)(1)(H). Pub. L. 95-600, Sec. 371(a)(1), added subpar. (H) relating to product liability losses.
Pub. L. 95-600, Sec. 601(b)(1), added subpar. (H) relating to an electing GSOC.
Subsec. (b)(3)(A). Pub. L. 95-600, Sec. 703(p)(1)(B), redesignated subpar. (C) as (A). Former subpar. (A), which related to conditions for application of paragraph (1)(A)(ii), was struck out.
Subsec. (b)(3)(B). Pub. L. 95-600, Sec. 703(p)(1)(B), (C), redesignated subpar. (D) as (B) and substituted ‘subparagraph (A)(iii)’ for ‘subparagraph (C)(iii)’. Former subpar. (B), which related to the applicability of paragraph (1)(A)(ii) to partnerships and electing small business corporations, was struck out.
Subsec. (b)(3)(C). Pub. L. 95-600, Sec. 703(p)(1)(B), redesignated subpar. (E) as (C). Former subpar. (C) redesignated (A).
Subsec. (b)(3)(D), (E). Pub. L. 95-600, Sec. 703(p)(1)(B), redesignated subpars. (D) and (E) as (B) and (C), respectively.
Subsecs. (i), (j). Pub. L. 95-600, Sec. 371(b), added subsec. (i) and redesignated former subsec. (i) as (j).
1977 - Subsec. (d)(8). Pub. L. 95-30 added par. (8).
1976 - Subsec. (b)(1)(B). Pub. L. 94-455, Sec. 806(a), inserted ‘Except as provided in subparagraphs (C), (D), (E), and (F), a net operating loss for any taxable year ending after December 31, 1975, shall be a net operating loss carryover to each of the 7 taxable years following the taxable year of such loss’ after ‘year of such loss’.
Subsec. (b)(1)(C). Pub. L. 94-455, Sec. 806(b)(1), 1901(a)(29)(C)(ii), inserted ‘For any taxable year ending after December 31, 1975, the preceding sentence shall be applied by substituting ‘9 taxable years’ for ‘7 taxable years’ ‘ after ‘year of such loss’, substituted ‘subsection (g)(1)’ for ‘subsection (j)(1)’ after ‘as defined in’ and ‘subsection (g)’ for ‘subsection (j)’ after ‘as provided in’.
Subsec. (b)(1)(D). Pub. L. 94-455, Sec. 1901(a)(29)(C)(iii), 2126, substituted ‘subsection (h)’ for ‘subsection (k)’ after ‘as defined in’ and ‘20’ for ‘15’ after ‘expropriation loss, to each of the’.
Subsec. (b)(1)(E). Pub. L. 94-455, Sec. 1606(b), added subpar. (E).
Subsec. (b)(2). Pub. L. 94-455, Sec. 1901(a)(29)(C)(iv), substituted ‘subsection (g)’ for ‘subsections (i) and (j)’ after ‘provided in’.
Subsec. (b)(3). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out ‘or his delegate’ after ‘Secretary’.
Subsec. (b)(3)(A)(i), (ii). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out ‘or his delegate’ in two places after ‘Secretary’.
Subsec. (b)(3)(C)(i). Pub. L. 94-455, Sec. 1901(a)(29)(C)(iii), substituted ‘subsection (h)’ for ‘subsection (k)’ after ‘as defined in’.
Subsec. (b)(3)(C)(ii), (iii). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out ‘Or his delegate’ in two places after ‘Secretary’.
Subsec. (b)(3)(E). Pub. L. 94-455, Sec. 806(c), 1901(a)(29)(A)(ii), added subpar. (E). Former subpar. (E), which related to applicability of special rules in computing taxpayer's net operating loss deduction, was struck out.
Subsec. (b)(3)(F). Pub. L. 94-455, Sec. 1901(a)(29)(A)(ii), struck out subpar. (F) which defined ‘class of products’ and provided for the use of information compiled or published by Secretary of Commerce or manufacturers as prima facie evidence of the total number of units of such class of products manufactured and produced in the United States in a calendar year.
Subsec. (c). Pub. L. 94-455, Sec. 1901(a)(29)(B), struck out ‘(for any taxable year ending after December 31, 1953)’ after ‘means’.
Subsec. (d)(5), (6). Pub. L. 94-455, Sec. 1052(c)(3), struck out par. (5) relating to special deductions for corporations concerning partially tax-exempt interest and Western Hemisphere corporations, and redesignated par. (6) as (5).
Subsec. (d)(7). Pub. L. 94-455, Sec. 1606(c), added par. (7).
Subsec. (e). Pub. L. 94-455, Sec. 1901(a)(29)(D), struck out ‘The preceding sentence shall apply with respect to all taxable years, whether they begin before, on, or after January 1, 1954’ after ‘applicable to such other taxable year’.
Subsec. (f). Pub. L. 94-455, Sec. 1901(a)(29)(C)(i), redesignated subsec. (h) as (f). Former subsec. (f), relating to net operating loss deduction for taxable years beginning in 1953 and ending in 1954, was struck out.
Subsec. (g). Pub. L. 94-455, Sec. 1901(a)(29)(C)(i), redesignated subsec. (j) as (g). Former subsec. (g), relating to special transitional rules to be applied to net operating loss deductions, was struck out.
Subsec. (g)(3)(C). Pub. L. 94-455, Sec. 806(b)(2), added subpar. (C).
Subsec. (g)(4). Pub. L. 94-455, Sec. 1901(a)(29)(E), struck out par. (4) relating to carryover of net operating loss for certain regulated transportation corporations for taxable years beginning in 1955 and ending in 1956.
Subsec. (h). Pub. L. 94-455, Sec. 1901(a)(29)(C)(i), redesignated subsec. (k) as (h). Former subsec. (h) redesignated (f).
Subsec. (i). Pub. L. 94-455, Sec. 1901(a)(29)(C)(i), redesignated subsec. (l) as (i). Former subsec. (i), relating to carryback of net operating loss for taxable years beginning in 1957 and ending in 1958, was struck out.
Subsecs. (j) to (l). Pub. L. 94-455, Sec. 1901(a)(29)(C)(i), redesignated subsecs. (j) to (l) as (g) to (i), respectively.
1971 - Subsec. (b)(1)(D). Pub. L. 91-677, Sec. 2(a), inserted ‘(or, with respect to that portion of the net operating loss for such year attributable to a Cuban expropriation loss, to each of the 15 taxable years following the taxable year of such loss)’ after ‘the 10 taxable years following the taxable year of such loss’.
Subsec. (b)(2). Pub. L. 91-677, Sec. 2(b), inserted provisions relating to treatment of Cuban expropriation losses.
Subsec. (k)(3). Pub. L. 91-677, Sec. 2(c), added par. (3).
1969 - Subsec. (b)(1). Pub. L. 91-172 substituted ‘(E), (F), and (G)’, for ‘and (E)’ in subpar. (A)(i) and added subpars. (F) and (G).
1967 - Subsec. (b)(1). Pub. L. 90-225, Sec. 3(a)(1)-(3), inserted reference to subpar. (E) in subpars. (A)(i) and (B), and added subpar. (E).
Subsec. (b)(3)(E), (F). Pub. L. 90-225, Sec. 3(a)(4), added subpars. (E) and (F).
1964 - Subsec. (b). Pub. L. 88-272, Sec. 210(a)(1)-(4), (b), inserted subpar. (D) in par. (1), references to such subpar. (D) in par. (1)(A)(i) and (1)(B), subpars. (C) and (D) in par. (3), provided that the net operating loss deduction in par. (2)(B) be determined without regard to that portion of a net operating loss due to a foreign expropriation loss, if such portion may not, under par. (1)(D), be carried back to such prior taxable year, and that if a portion of the net operating loss is attributable to foreign expropriation to which par. (1)(D) applied, such portion shall be considered a separate loss for such year to be applied after the other portion of such net operating loss.
Subsec. (j)(1), (2), Pub. L. 88-272, Sec. 234(b)(5), substituted references to section 7701(a)(33) for references to section 1503(c)(1) or (2), wherever appearing.
Subsecs. (k), (l). Pub. L. 88-272, Sec. 210(a)(5), added subsec. (k) and redesignated former subsec. (k) as (l).
1962 - Subsec. (b)(1). Pub. L. 87-794 designated existing provisions as cl. (A)(i) and struck out provisions therefrom which authorized a net operating loss for any taxable year ending after Dec. 31, 1957, to be a net operating loss carryover to each of the 5 taxable years following the taxable year of such loss, and added cls. (A)(ii), (B), and (C).
Subsec. (b)(2). Pub. L. 87-794 inserted reference to subsection (j), and substituted ‘shall be carried to the earliest of the taxable years to which (by reason of paragraph (1))’ for ‘shall be carried to the earliest of the 8 taxable years to which (by reason of subparagraphs (A) and (B) of paragraph (1))’, and ‘each of the other taxable years’ for ‘each of the other 7 taxable years’.
Subsec. (b)(3). Pub. L. 87-794 added par. (3).
Pub. L. 87-710, Sec. 1(a), authorized a carryover of a net operating loss for any taxable year ending after Dec. 31, 1955, to each of the 5 taxable years following the taxable year of loss, or when such loss occurs in the case of regulated transportation corporation, except as provided in subsec. (j), then to each of the 7 taxable years following the taxable year of loss, and struck out provisions authorizing a net operating loss for any taxable years ending Dec. 31, 1957, to be carried over to each of the 5 taxable years following the taxable year of such loss, in par. (1), and inserted reference to subsec. (j) in par. (2).
Subsec. (d)(4)(D). Pub. L. 87-792 added subpar. (D).
Subsecs. (j), (k). Pub. L. 87-710, Sec. 1(b), added subsec. (j) and redesignated former subsec. (j) as (k).
1958 - Subsec. (b). Pub. L. 85-866, Sec. 203(a), substituted ‘1957’ for ‘1953’, and ‘3’ for ‘2’ in par. (1), and substituted ‘subsection (i)’ for ‘subsection (f)’, ‘8’ for ‘7’, and ‘7’ for ‘6’ in par. (2).
Subsecs. (f)(3), (4). Pub. L. 85-866, Sec. 14(a), added pars. (3) and (4).
Subsec. (g)(3), (4). Pub. L. 85-866, Sec. 14(b), added par. (3) and redesignated former par. (3) as (4).
Subsecs. (h) to (j). Pub. L. 85-866, Sec. 64(b), 203(b), added subsecs. (h) and (i) and redesignated former subsec. (h) as (j).
Amendment by Pub. L. 115-141, Div. U, Sec. 401(a)(53), is effective March 23, 2018.
Amendments by Pub. L. 115-97, Sec. 11011(d)(1), effective for taxable years beginning after December 31, 2017.
Amendments by Pub. L. 115-97, Sec. 13302(a) and (d)(2), effective for losses arising in taxable years beginning after December 31, 2017.
Amendments by Pub. L. 115-97, Sec. 13302(b), (c), and (d)(1), effective for net operating losses arising in taxable years beginning after December 31, 2017.
Amendment by Pub. L. 115-97, Sec. 13305(b)(3), effective for taxable years beginning after December 31, 2017. Pub. L. 115-141, Div .T, Sec. 101(c), added the following transition rule:
Amendment by Pub. L. 115-97, Sec. 14202(b)(1), effective for taxable years beginning after December 31, 2017.
Amendment by Pub. L. 113-295, Div. A, Sec. 211(c)(1)(B), effective as if included in the provision of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008 [Pub. L. 110-343, Sec. 706] to which it relates [Effective for disasters declared in taxable years beginning after December 31, 2007].
Amendment by Sec. 13(c) of Pub. L. 111-92 effective for net operating losses arising in taxable years ending after December 31, 2007.
Sec. 13(e)(4) of Pub. L. 111-92 provided the following transitional rule:
“(4) TRANSITIONAL RULE.—In the case of any net operating loss (or, in the case of a life insurance company, any loss from operations) for a taxable year ending before the date of the enactment of this Act—
“(A) any election made under section 172(b)(3) or 810(b)(3) of the Internal Revenue Code of 1986 with respect to such loss may (notwithstanding such section) be revoked before the due date (including extension of time) for filing the return for the taxpayer's last taxable year beginning in 2009, and
“(B) any application under section 6411(a) of such Code with respect to such loss shall be treated as timely filed if filed before such due date.”
Sec. 13(f) of Pub. L. 111-92 provided the following exception:
“(f) EXCEPTION FOR TARP RECIPIENTS.—The amendments made by this section shall not apply to—
“ (1) any taxpayer if—
“(A) the Federal Government acquired before the date of the enactment of this Act an equity interest in the taxpayer pursuant to the Emergency Economic Stabilization Act of 2008,
“(C) such taxpayer receives after such date of enactment funds from the Federal Government in exchange for an interest described in subparagraph (A) or (B) pursuant to a program established under title I of division A of the Emergency Economic Stabilization Act of 2008 (unless such taxpayer is a financial institution (as defined in section 3 of such Act) and the funds are received pursuant to a program established by the Secretary of the Treasury for the stated purpose of increasing the availability of credit to small businesses using funding made available under such Act), or
Amendments by Div. B, Sec. 1211 of Pub. L. 111-5 effective for net operating losses arising in taxable years ending after December 31, 2007. Sec. 1211(d)(2) of Pub. L. 111-5, Div. B, provided the following transitional rule:
“(2) TRANSITIONAL RULE.—In the case of a net operating loss for a taxable year ending before the date of the enactment of this Act [Enacted: Feb. 17, 2009]—
“(A) any election made under section 172(b)(3) of the Internal Revenue Code of 1986 with respect to such loss may (notwithstanding such section) be revoked before the applicable date,
“(B) any election made under section 172(b)(1)(H) of such Code with respect to such loss shall (notwithstanding such section) be treated as timely made if made before the applicable date, and
“(C) any application under section 6411(a) of such Code with respect to such loss shall be treated as timely filed if filed before the applicable date.
“For purposes of this paragraph, the term “applicable date” means the date which is 60 days after the date of the enactment of this Act [Enacted: Feb. 17, 2009].”
Amendments by Div. C, Sec. 706(a)(2)(D) of Pub. L. 110-343 effective for disasters declared in taxable years beginning after December 31, 2007.
Amendments by Div. C, Sec. 708 of Pub. L. 110–343 effective for losses arising in taxable years beginning after December 31, 2007, in connection with disasters declared after such date.
Pub. L. 110-343, Div. C, Sec. 712, as amended by Pub. L. 113-295, Div. A, Sec. 211(c)(3), provided that:
“COORDINATION WITH HEARTLAND DISASTER RELIEF. The amendments made by this subtitle, other than the amendments made by sections 706(a)(2), 710, and 711, shall not apply to any disaster described in section 702(b)(1)(A), or to any expenditure or loss resulting from such disaster.”
Amendments by Sec. 402(f) of Pub. L. 109-135 applicable as if included in the provisions of the Energy Policy Act of 2005 [Pub. L. 109-58, Sec. 1311] to which they relate.
Amendment by Sec. 403(a)(17) of Pub. L. 109-135 applicable as if included in the provisions of the American Jobs Creation Act of 2004 [Pub. L. 108-357, Sec. 102] to which it relates.
Amendment by Sec. 1311 of Pub. L. 109-58 applicable on the date of the enactment of this Act [Enacted: Aug. 8, 2005].
Amendment by Sec. 403(b)(1) of Pub. L. 108-311 applicable as if included in the provision of the Job Creation and Worker Assistance Act of 2002 [Sec. 102] to which it relates [effective: net operating losses for taxable years ending after Dec. 31, 2000].
Amendments by Sec. 102 of Pub. L. 107-147 applicable to net operating losses for taxable years ending after December 31, 2000.
Amendment by Sec. 417 of Pub. L. 107-147 applicable on the date of the enactment of this Act.
Amendment by Sec. 2013 of Pub. L. 105-277 applicable to net operating losses for taxable years beginning after December 31, 1997.
Amendment by Sec. 3004(a) of Pub. L. 105-277 applicable to net operating losses arising in taxable years ending after the date of the enactment of this Act [enacted: Oct. 21, 1998].
Amendment by Sec. 4003(h) of Pub. L. 105-277 effective as if included in the provisions of the 1997 Act to which they relate.
Amendment by Sec. 4004(a) of Pub. L. 105-277 applicable to taxable years beginning after December 31, 1983.
Amendment by Sec. 1082 of Pub. L. 105-34 applicable to net operating losses for taxable years beginning after the date of the enactment of this Act [Aug. 5, 1997].
Amendment by section 1702 of Pub. L. 104-188 effective as if included in related provision of the Revenue Reconciliation Act of 1990, unless otherwise expressly provided.
Section 13113(e) of Pub. L. 103-66 provided that: “The amendments made by this section shall apply to stock issued after the date of the enactment of this Act [Enacted: Aug. 10, 1993].
Section 11324(b) of Pub. L. 101-508 provided that:
‘(1) In general. - Except as provided in paragraph (2), the amendment made by subsection (a) (amending this section) shall apply to acquisitions after October 9, 1990.
‘(2) Binding contract exception. - The amendment made by subsection (a) shall not apply to any acquisition pursuant to a written binding contract in effect on October 9, 1990, and at all times thereafter before such acquisition.’
Amendment by section 11701(d) of Pub. L. 101-508 effective, except as otherwise provided, as if included in the provision of the Revenue Reconciliation Act of 1989, Pub. L. 101-239, title VII, to which such amendment relates, see section 11701(n) of Pub. L. 101-508, set out as a note under section 42 of this title.
Section 11811(c) of Pub. L. 101-508 provided that: ‘The amendments made by this section (amending this section) shall apply to net operating losses for taxable years beginning after December 31, 1990.’
Section 7211(c) of Pub. L. 101-239 provided that:
‘(1) In general. - Except as provided in this subsection, the amendments made by this section (amending this section) shall apply to corporate equity reduction transactions occurring after August 2, 1989, in taxable years ending after August 2, 1989.
‘(2) Exceptions. - In determining whether a corporate equity reduction transaction has occurred after August 2, 1989, there shall not be taken into account -
‘(A) acquisitions or redemptions of stock, or distributions with respect to stock, occurring on or before August 2, 1989,
‘(B) acquisitions or redemptions of stock after August 2, 1989, pursuant to a binding written contract (or tender offer filed with the Securities and Exchange Commission) in effect on August 2, 1989, and at all times thereafter before such acquisition or redemption, or
‘(C) any distribution with respect to stock after August 2, 1989, which was declared on or before August 2, 1989.
Any distribution to which the preceding sentence applies shall be taken into account under section 172(m)(3)(C)(ii)(I) of the Internal Revenue Code of 1986 (relating to base period for distributions).'
Amendment by section 104(b)(4) of Pub. L. 99-514 applicable to taxable years beginning after Dec. 31, 1986, see section 151(a) of Pub. L. 99-514, set out as a note under section 1 of this title.
Amendment by section 301(b)(3) of Pub. L. 99-514 applicable to taxable years beginning after Dec. 31, 1986, see section 301(c) of Pub. L. 99-514, set out as a note under section 62 of this title.
Amendment by section 901(d)(4)(B) of Pub. L. 99-514 applicable to taxable years beginning after Dec. 31, 1986, see section 901(e) of Pub. L. 99-514, set out as a note under section 166 of this title.
Section 903(c) of Pub. L. 99-514 provided that:
‘(1) In general. - Except as provided in paragraph (2), the amendments made by this section (amending this section) shall apply to losses incurred in taxable years beginning after December 31, 1986.
‘(2) Additional carryforward period for losses of thrift institutions. - Subparagraph (M) of section 172(b)(1) of the Internal Revenue Code of 1986 (as added by this section) shall apply to losses incurred in taxable years beginning after December 31, 1981.'
Amendment by section 1303(b)(1), (2) of Pub. L. 99-514 effective Oct. 22, 1986, see section 1311(f) of Pub. L. 99-514, as amended, set out as an Effective Date; Transitional Rules note under section 141 of this title.
Amendment by section 91(d) of Pub. L. 98-369 applicable to losses for taxable years beginning after Dec. 31, 1983, see section 91(g)(6) of Pub. L. 98-369, as amended, set out as a note under section 461 of this title.
Section 177(d) of Pub. L. 98-369, as amended by Pub. L. 99-514, Sec. 2, title XVIII, Sec. 1812(d)(2), Oct. 22, 1986, 100 Stat. 2095, 2836, provided that:
‘(1) In general. - The amendments made by this section (amending this section and section 246 of this title and section 1452 of Title 12, Banks and Banking) shall take effect on January 1, 1985.
‘(2) Adjusted basis of assets. -
‘(A) In general. - Except as otherwise provided in subparagraph (B), the adjusted basis of any asset of the Federal Home Loan Mortgage Corporation held on January 1, 1985, shall -
‘(i) for purposes of determining any loss, be equal to the lesser of the adjusted basis of such asset or the fair market value of such asset as of such date, and
‘(ii) for purposes of determining any gain, be equal to the higher of the adjusted basis of such asset or the fair market value of such asset as of such date.
‘(B) Special rule for tangible depreciable property. - In the case of any tangible property which -
‘(i) is of a character subject to the allowance for depreciation provided by section 167 of the Internal Revenue Code of 1986 (formerly I.R.C. 1954 ), and
‘(ii) is held by the Federal Home Loan Mortgage Corporation on January 1, 1985, the adjusted basis of such property shall be equal to the lesser of the basis of such property or the fair market value of such property as of such date.
‘(3) Treatment of participation certificates. -
‘(A) In general. - Paragraph (2) shall not apply to any right to receive income with respect to any mortgage pool participation certificate or other similar interest in any mortgage (not including any mortgage).
‘(B) Treatment of certain sales after march 15, 1984, and before january 1, 1985. - If any gain is realized on the sale or exchange of any right described in subparagraph (A) after March 15, 1984, and before January 1, 1985, the gain shall not be recognized when realized but shall be recognized on January 1, 1985.
‘(4) Clarification of earnings and profits of federal home loan mortgage corporation. -
‘(A) Treatment of distribution of preferred stock, etc. - For purposes of the Internal Revenue Code of 1986, the distribution of preferred stock by the Federal Home Loan Mortgage Corporation during December of 1984, and the other distributions of such stock by Federal Home Loan Banks during January of 1985, shall be treated as if they were distributions of money equal to the fair market value of the stock on the date of the distribution by the Federal Home Loan Banks (and such stock shall be treated as if it were purchased with the money treated as so distributed). No deduction shall be allowed under section 243 of the Internal Revenue Code of 1986 with respect to any dividend paid by the Federal Home Loan Mortgage Corporation out of earnings and profits accumulated before January 1, 1985.
‘(B) Section 246(a) not to apply to distributions out of earnings and profits accumulated during 1985. - Subsection (a) of section 246 of the Internal Revenue Code of 1986 shall not apply to any dividend paid by the Federal Home Loan Mortgage Corporation during 1985 out of earnings and profits accumulated after December 31, 1984.
‘(5) Adjusted basis. - For purposes of this subsection, the adjusted basis of any asset shall be determined under part II of subchapter O of the Internal Revenue Code of 1986.
‘(6) No carrybacks for years before 1985. - No net operating loss, capital loss, or excess credit of the Federal Home Loan Mortgage Corporation for any taxable year beginning after December 31, 1984, shall be allowed as a carryback to any taxable year beginning before January 1, 1985.
‘(7) No deduction allowed for interest on replacement obligations. -
‘(A) In general. - The Federal Home Loan Mortgage Corporation shall not be allowed any deduction for interest accruing after December 31, 1984, on any replacement obligation.
‘(B) Replacement obligation defined. - For purposes of subparagraph (A), the term ‘replacement obligation’ means any obligation to any person created after March 15, 1984, which the Secretary of the Treasury or his delegate determines replaces any equity or debt interest of a Federal Home Loan Bank or any other person in the Federal Home Loan Mortgage Corporation existing on such date. The preceding sentence shall not apply to any obligation with respect to which the Federal Home Loan Mortgage Corporation establishes that there is no tax avoidance effect.'
Amendment by section 491(d)(5) of Pub. L. 98-369 applicable to obligations issued after Dec. 31, 1983, see section 491(f)(1) of Pub. L. 98-369, set out as a note under section 62 of this title.
Section 722(a)(6) of Pub. L. 98-369 provided that: ‘Any amendment made by this subsection (amending this section and sections 57, 1256, and 5684 of this title, and provisions set out as a note under section 338 of this title) shall take effect as if included in the provisions of the Technical Corrections Act of 1982 (Pub. L. 97-448) to which such amendment relates.'
Section 102(d) of Pub. L. 97-362 provided that: ‘The amendments made by this section (amending this section) shall apply to net operating losses for taxable years beginning after December 31, 1981.’
Amendment by Pub. L. 97-34 applicable to net operating losses in taxable years ending after Dec. 31, 1975, with special effective date for the amendment by section 207(a)(2)(B)(i) of Pub. L. 97-34, and net operating loss for any taxable year ending on or before Dec. 31, 1975, which could be a net operating loss carryover to a taxable year ending in 1981 by reason of subsec. (b)(1)(E)(ii) (as in effect before the date of enactment of Pub. L. 97-34 and as modified by section 1(b) of Pub. L. 96-595), to be a net operating loss carryover under this section to each of the 15 taxable years following the taxable year of such loss, see section 209(c)(1) of Pub. L. 97-34, set out as an Effective Date note under section 168 of this title.
Section 1(b) of Pub. L. 96-595, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘The amendment made by subsection (a) (amending this section) shall apply to the determination of the net operating loss deduction for taxable years ending after October 4, 1976. For purposes of applying the preceding sentence to any net operating loss for a taxable year which is not a REIT year and which ends on or before October 4, 1976, subclause (II) of section 172(b)(1)(E)(ii) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954 ) shall be applied by substituting ‘the number of REIT years to which such loss was a net operating loss carryback’ for ‘the number of taxable years to which such loss may not be a net operating loss carryback by reason of subclause (I)’. In the case of a net operating loss for a taxable year described in the preceding sentence, subclause (II) of section 172(b)(1)(E)(ii) of such Code shall not apply to any taxpayer which acted so as to cause it to cease to qualify as a ‘real estate investment trust’ within the meaning of section 856 of such Code if the principal purpose for such action was to secure the benefit of the allowance of a net operating loss carryover under section 172(b)(1)(B) of such Code.'
Section 371(d) of Pub. L. 95-600 provided that: ‘The amendments made by this section (amending this section and section 537 of this title) shall apply with respect to taxable years beginning after September 30, 1979.’
Section 601(d) of Pub. L. 95-600 provided that: ‘The amendments made by this section (enacting sections 1391 to 1397 and 6039B of this title and amending this section and sections 1016 and 3402 of this title) shall apply with respect to corporations chartered after December 31, 1978, and before January 1, 1984.’
Section 701(d)(2) of Pub. L. 95-600 provided that: ‘The amendment made by paragraph (1) (amending this section) shall apply to losses incurred in taxable years ending after December 31, 1975.’
Section 703(p)(4) of Pub. L. 95-600 provided that: ‘The amendments made by this subsection (amending this section and sections 6501 and 6511 of this title) shall apply with respect to losses sustained in taxable years ending after the date of the enactment of this Act (Nov. 6, 1978).’
Section 806(g)(1) of Pub. L. 94-455 provided that: ‘The amendments made by subsections (a), (b), (c), and (d) (amending this section and sections 812 and 825 of this title) shall apply to losses incurred in taxable years ending after December 31, 1975.’
Amendment by section 1052(c)(3) of Pub. L. 94-455 effective with respect to taxable years beginning after December 31, 1979, see section 1052(d) of Pub. L. 94-455, set out as a note under section 170 of this title.
Amendment by section 1606(b), (c) of Pub. L. 94-455 effective for taxable years ending after Oct. 4, 1976, see section 1608(c) of Pub. L. 94-455, set out as a note under section 857 of this title.
Amendment by section 1901(a)(29) of Pub. L. 94-455 effective for taxable years ending after Oct. 4, 1976, see section 1901(d) of Pub. L. 94-455, set out as a note under section 2 of this title.
Section 2(d) of Pub. L. 91-677 provided that: ‘The amendments made by this section (amending this section) shall apply in respect of foreign expropriation losses sustained in taxable years ending after December 31, 1958.’
Section 3(b) of Pub. L. 90-225 provided that: ‘No interest shall be paid or allowed with respect to any overpayment of tax resulting from the application of the amendments made by subsection (a) (amending this section) for any period prior to the date of the enactment of this Act (Dec. 27, 1967).’
Section 3(c) of Pub. L. 90-225 provided that: ‘The amendments made by subsection (a) (amending this section) shall apply with respect to net operating losses sustained in taxable years ending after December 31, 1966.’
Section 210(c) of Pub. L. 88-272, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘The amendments made by this section (amending this section) shall apply in respect of foreign expropriation losses (as defined in section 172(k) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954 ), as amended by subsection (a)(5) of this section), sustained in taxable years ending after December 31, 1958.'
Amendment by section 234(b)(5) of Pub. L. 88-272 applicable to taxable years beginning after Dec. 31, 1963, see section 234(c) of Pub. L. 88-272, set out as a note under section 1503 of this title.
Section 317(b) of Pub. L. 87-794 provided that the amendment made by that section is effective with respect to net operating losses for taxable years ending after Dec. 31, 1955.
Section 2 of Pub. L. 87-710 provided that: ‘The amendments made by the first section of this Act (amending this section) shall apply only with respect to net operating losses for taxable years ending after December 31, 1955.’
Section 203(c) of Pub. L. 85-866 provided that: ‘The amendments made by subsections (a) and (b) (amending this section) shall apply in respect of net operating losses for taxable years ending after December 31, 1957.’
Amendment by section 14(a), (b) of Pub. L. 85-866 applicable to taxable years beginning after Dec. 31, 1953, and ending after Aug. 16, 1954, see section 1(c)(1) of Pub. L. 85-866, set out as a note under section 165 of this title.
Section 64(e) of Pub. L. 85-866 provided that: ‘The amendments made by this section (enacting sections 1371 to 1377 and 6037 of this title, amending this section and sections 1016 and 1504, and renumbering former section 6037 as 6038 of this title) shall apply only with respect to taxable years beginning after December 31, 1957’.
Section 13(d) of Pub. L. 111-92 provided that:
“(d) ANTI-ABUSE RULES.—The Secretary of Treasury or the Secretary's designee shall prescribe such rules as are necessary to prevent the abuse of the purposes of the amendments made by this section, including anti-stuffing rules, anti-churning rules (including rules relating to sale-leasebacks), and rules similar to the rules under section 1091 of the Internal Revenue Code of 1986 relating to losses from wash sales.”
Section 1211(c) of Pub. L. 111-5, Div. B, provided that:
“(c) ANTI-ABUSE RULES.—The Secretary of Treasury or the Secretary's designee shall prescribe such rules as are necessary to prevent the abuse of the purposes of the amendments made by this section, including anti-stuffing rules, anti-churning rules (including rules relating to sale-leasebacks), and rules similar to the rules under section 1091 of the Internal Revenue Code of 1986 relating to losses from wash sales.”
NET OPERATING LOSSES IN TAXABLE YEARS ENDING DURING 2001 OR 2002
Section 403(b)(2) of Pub. L. 108-311 provided that:
“(2) In the case of a net operating loss for a taxable year ending during 2001 or 2002--
“(A) an application under section 6411(a) of the Internal Revenue Code of 1986 with respect to such loss shall not fail to be treated as timely filed if filed before November 1, 2002,
“(B) any election made under section 172(b)(3) of such Code may (notwithstanding such section) be revoked before November 1, 2002, and
“(C) any election made under section 172(j) of such Code shall (notwithstanding such section) be treated as timely made if made before November 1, 2002.”
For provisions that nothing in amendment by section 11811 of Pub. L. 101-508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liability for tax for periods ending after Nov. 5, 1990, see section 11821(b) of Pub. L. 101-508, set out as a note under section 29 of this title.
Section 11811(b)(2)(B) of Pub. L. 101-508 provided that: ‘The portion of any loss which is attributable to a deferred statutory or tort liability loss (as defined in section 172(k) of the Internal Revenue Code of 1986 as in effect on the day before the date of the enactment of this Act (Nov. 5, 1990)) may not be carried back to any taxable year beginning before January 1, 1984, by reason of the amendment made by subparagraph (A) (amending this section).'
Section 14 of Pub. L. 85-866 provided that if any refund or credit of any overpayment resulting from application of subsecs. (a) and (b) of Pub. L. 85-866, amending former subsecs. (f)(3), (4) and (g)(3), (4), was prevented on Sept. 2, 1958 or 6 months thereafter, by operation of any law or rule of law, refund was to be allowed if a claim was filed within six months of the date of such date but such refund was to be without interest.
For payment of interest attributable to net operating loss carryback, see section 83(e) of Pub. L. 85-866, set out as a note under section 6601 of this title.