🎥+✏️NOLs – Corporations🟢

Responses

1. 

   Daniel Malinowski 7 July 2024

   NOLs – Corporations – JO
   This example includes 2019 (and 2020) income, but you did not limit the NOL deduction to 80% of taxable income. Is that in error?
   TCJA limits NOL deductions to 80% of taxable income starting in 2018.

   1. 

      Maroun, CPA 8 July 2024

      Hello Daniel,

      Please review the NOL rules carefully starting from minute 8 because they can be tricky.
      – NOLs arising after December 31, 2017, and carried forward to 2018, 2019, and 2020 may be deducted against up to 100% of these years’ taxable income before the NOL deduction.
      That’s why in the example, the NOL deduction offsets 100% of 2019 and 2020 taxable income.
      – NOLs arising after December 31, 2017, and carried forward to 2021 onward may be deducted against up to 80% of taxable income before the NOL deduction.
      That’s why in the example, the NOL deduction offsets 80% of 2021 taxable income ($10,000*80%).

      I hope this helps!

2. 

   Bashar 1 April 2025

   Hello,

   In reference to minute 7:57, DRD should have been -$39,000 instead of $-37,000, and current NOL should have been -$19,000 instead of -$17,000.

   1. 

      Maroun, CPA 3 April 2025

      Hello Bashar,

      I’ve corrected the typo.
      Thank you for bringing this to our attention!

3. 

   James 5 September 2025

   At 7:49 it is stated that the NOL is -19,000. In the previous slide it states (second check mark)
   “Dividends -received deduction (DRD) limitations that apply when determining the corporation’s taxable income are disregarded when determining the NOL if the deduction of the total DRD creates or increases the corporation’s NOL.

   Doesn’t the total DRD create the NOL?

   1. 

      Maroun, CPA 8 September 2025

      Hi James,

      The slide correctly ignores the DRD limitation because the full DRD creates the NOL.

      Pre-DRD taxable income = 250,000 − 20,000 − 270,000 + 60,000 = 20,000
      Full DRD (65% × 60,000) = 39,000
      NOL = 20,000 − 39,000 = −19,000

      When the total DRD creates or increases an NOL, the taxable-income limitation doesn’t apply, so we use the full $39,000 DRD. If it didn’t create an NOL, the DRD would be limited (here it would have been 65% × 20,000 = 13,000).

      I hope this helps!

4. 

   El Gabidoff 29 July 2026

   Hi, is section 382 limitation discussed elsewhere? Thank you.