1120-US: Calculate current year NOL deduction

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Starting with tax year 2021, UltraTax CS limits the NOL deduction to 80 percent of the excess (if any) of taxable income over the total NOL deduction from NOLs arising in taxable years beginning before 2018. UltraTax CS displays this calaculation as a Non Required Statement when printing the return. 

Examples

  1. Corporation A has current net income of $100,000 and prior losses carried forward of:
    • 2017 - $10,000
    • 2018 - $50,000
    • 2019 - $75,000
    • 2020 - $16,000

    Net income $100,000 less pre-2018 losses equals $90,000

    $90,000 times 80 percent equals $72,000

    Total NOL deduction equals $82,000 (10,000 + 50,000 + 22,000)

  2. Corporation B has current net income of $70,000 and prior losses carried forward of:
    • 2017 - $11,000
    • 2018 - $25,000
    • 2019 - $2,000
    • 2020 - $5,000

    Net income $70,000 less pre-2018 losses equals $59,000

    $59,000 times 80 percent equals $47,200

    Total NOL deduction equals $43,000 (11,000 + 25,000 + 2,000 + 5,000)

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