TEI supports lengthening the net operating loss carryback
period from two years to five years, effective for taxable years ending in 2008 or 2009 (or, at the election of the taxpayer, taxable years beginning in 2008 or 2009).
The tax loss carryback
provision is a morsel of the roughly $145-billion economic stimulus plan being negotiated by the administration and Congress, which would include rebates of several hundred dollars for individuals and couples, and so-called bonus depreciation to allow companies to deduct 50 percent of business investments they make this year.
Schedule of Computation of Realizable Tax Benefits Carryback Current Carryforward Year 19X0 Year X1 Years 2-16 Pretax income (loss) $120 $(150) Future income exclusive of reversing temporary differences N/A N/A $250 Permanent difference Tax-exempt interest (50) N/A Temporary differences Accelerated depreciation (70) 70 Warranty accrual 80 (80) Tax (deductible) before loss carryback
-carryforward $120 $(190) S240 Loss carryback
(120) 120 Loss carryforward 70 (70) Taxable (deductible) $ - $ - 170 Tax rate 34% 34% 34% Tax before credit $ - $ - S 58 Tax credit - - <58> Tax $ - $ - $ - Journal Entry Refundable income taxes ($120 x .
6511(d)(2) further prescribes that in the case of an NOL or capital loss carryback
, the statute of limitation to claim a refund is three years from the fifing date of the return that originates the carryback claim.
Many states follow the federal net operating loss carryback
and carryforward periods.
Both courts held that the loss carryback
and the refund claims were property of the estate and transferrable at the time the bankruptcy petition was filed.
He cited the proposed 50% bonus depreciation provision and operating loss carryback
provision--both are measures which NAIOP supports and both should provide some much-needed relief.
It would extend unemployment benefits, lengthen the net operating loss carryback
period and extend expiring energy tax incentives, including those for consumers making residential improvements such as new windows, doors and furnaces.
Extending the capital loss carryback
period to five years.
i]f the claim for credit or refund relates to an overpayment attributable to a net operating loss carryback
or a capital loss carryback
, in lieu of the 3-year period of limitation prescribed in subsection (a), the period shall be that period which ends 3 years after the time prescribed by law for filing the return (including extensions thereof) for the taxable year of the net operating loss or net capital loss which results in such carryback, or the period prescribed in subsection (c) in respect of such taxable year, whichever expires later.
While a refund should be forthcoming within 90 days after the Form 1139 is filed, the corporation could instead extend the payment period by filing Form 1138, Extension of Time for Payment of Taxes by a Corporation Expecting a Net Operating Loss Carryback