- July 2, 2021
- Posted by: Stratford Team
- Category: Business
The IRS issued Rev. Proc. 2021-14 on Wednesday instructing taxpayers with a net operating loss (NOL), consisting entirely or partly of a “farming loss,” as defined in Sec. 172(b)(1)(B)(ii), on how to make or revoke certain elections including those available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136.
For most taxpayers, the treatment of NOLs was changed by the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, for NOLs arising in tax years beginning after Dec. 31, 2017, by limiting their amount allowed as a deduction in a tax year to 80% of taxable income (computed without the NOL deduction), with no carryback allowance as formerly. Any portion of an NOL that is a farming loss, however, (as defined under Sec. 172(b)(1)(B)(ii)) could be carried back two years, which the taxpayer could (irrevocably) elect to waive.
The CARES Act suspended the 80% limitation for NOLs, including those consisting…
