Question

net operating losses (NOLs) arising before 12/31/17 can be carried forward 20 years and applied against 100% of a future year's net operating income, and can be carried back 2 years to be applied to previously earned net operating income. It also explains that NOLs arising after 1/1/18 can be carried forward indefinitely and applied towards 80% of a future year's net operating income. But I didn't see an information on carryback for NOLs arising after 1/1/18. Is this because NOLs arising after 1/1/18 can't be carried back? Or is this because the limitation hasn't changed and they can still be carried back 2 years just like NOLs from previous years?

Answer 1

Solution:_

No, NOLs can not be carried back.

Explanation:-

Finally, §13302 of the Act amended §172, which limits net operating losses (NOLs), including those generated by an exempt organization’s UT/B. The Act limits the NOL deduction to 80% of the UBTI and restricts amounts carried to other years by adjusting the NOL applied to account for the loss limitation arising in tax years beginning after December 31, 2017. The Act generally eliminates carrybacks for UBTI and allows unused NOLs to be carried forward indefinitely. Note also that §13702 of the Act effectively limits NOL applications to the particular UT/B, and the IRS has consistently viewed consistent long-term losses of an endeavor as lacking a profit motive, thus eliminating them from UBTI consideration.