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California net operating loss is calculated on Form 3805V. There are four main types of net operating loss: Disaster, General, New Business, and Small Business. By default, the current year NOL is classified as General. If any portion of the NOL needs to be re-categorized to a different type, use the Net operating loss statement dialogs on Screen CACO to enter data as follows:

• Enter the current year in the Loss Year column.
• Enter the NOL Type for the portion of NOL to be re-assigned.
• Enter the amount to be re-assigned in the Initial Loss Total Source column. (If applicable to part-year/nonresident return, also do the same for the Initial Loss CA Source column.)

Any portion of the calculated current year NOL that is not re-assigned retains the General NOL designation.

As of tax year 2015, all four NOL types are eligible for 2-year carryback or 20-year carryforward. The California Net Operating Loss Carryback Worksheet is calculated based on the net operating loss amount calculated via Form 3805V (as re-assigned to different NOL type, if applicable) and the taxable income from prior years entered on (or proforma’d to) Screen CACO. Information from the worksheet is used to calculate Form 3805V, Page 4. For part-year/nonresident returns, a second unit of page 4 is calculated for California sources amounts. If the taxpayer elects to forgo the NOL carryback, enter data in the Do not carry back current year NOL field on Screen CANOL to suppress the calculation of the Carryback Worksheet.

Any NOL amount that was not carried back will proforma.

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