[ZCPA2]

Can someone explain to me how Section 382 limitations on NOL carryforwards work? For example, if the annual limit is $50k and there is $500k in unused NOL carryforwards, is $50k the most I can carryforward in that particular year (assuming operating income is equal to or greater than $50k for the year)?

[PeteX13]

Section 382 is about limiting the amount of a carryforward loss you can use each year. So in this case if the limit is 50k, then 50k can be used in the current year to offset income and the remaining 450k is suspended until next year.

Also, if you only had say 20k of taxable income but could have used 50k of Section 382 losses, you can use 80k in the following year provided you have sufficient income.

[Author]

Replies