Connecticut Administrative Code › Title 12 - Taxation › 740(a) - INCOME TAX › Part III - Part-year Resident individuals & trusts › Section 12-717-2 - Part-year residents: net operating loss deduction

Current through July 10, 2024
(a)
Change of status from resident to
				nonresident
. Where the federal income tax return of an individual for a
				taxable year in which such taxpayer changes resident status from resident to
				nonresident includes a net operating loss deduction, the amount of such
				deduction used for federal income tax purposes for the period of residence
				shall be taken into account on the Connecticut income tax return for the period
				of residence. Any excess of the amount of the net operating loss deduction not
				used for the period of residence may be used for the period of nonresidence,
				but only to the extent that such excess is based solely on items of income,
				gain, loss and deduction derived from or connected with Connecticut
				sources.
(b)
Change of status
				from nonresident to resident
. In computing the Connecticut adjusted
				gross income derived from or connected with Connecticut sources of an
				individual for the period of nonresidence, any net operating loss deduction
				shall be based solely on items of income, gain, loss and deduction derived from
				or connected with Connecticut sources. For purposes of this subsection, the
				source of the net operating loss shall be determined by reference to the source
				of the items of income, gain, loss and deduction for the taxable year or years
				in which the net operating loss was sustained. A net operating loss deduction
				may be applied to the period of residence in the amount which would be allowed
				as a net operating loss deduction for federal income tax purposes, if a federal
				income tax return had been filed for the period of residence.
(c)
Carryback and carryforward of net
				operating loss
. A net operating loss sustained in the taxable year in
				which the change of resident status occurs may be a carryback or carryforward
				to another taxable year under the following conditions:
(1) If the taxable year to which the
				carryback or carryforward is to be applied is a taxable year in which an
				individual is a resident, such carryback or carryforward may be applied for the
				period of residence to the extent such carryback or carryforward is includible
				as a carryback or carryforward in the computation of federal adjusted gross
				income of an individual for the carryback or carryforward year.
(2) If the taxable year to which the
				carryback or carryforward is to be applied is a taxable year in which an
				individual is a nonresident, such carryback or carryforward may be applied for
				the period of nonresidence to the extent that such carryback or carryforward is
				based solely on items of income, gain, loss or deduction derived from or
				connected with Connecticut sources.
(3) Anything to the contrary in this section
				notwithstanding, no loss sustained in a taxable year that was not a Connecticut
				taxable year may be carried forward to a succeeding taxable year. In addition,
				no loss sustained in a Connecticut taxable year may be carried back to a
				preceding taxable year that was not a Connecticut taxable year.
(4) For purposes of this section,
				"Connecticut taxable year" means a taxable year beginning on or after January
				1, 1991 (the effective date of the Connecticut Income Tax Act).