How Do Companies Take Advantage of the Tax Loss Carryforward Rule? || NOL Carryforward Explained

A tax loss carryforward is a provision that allows taxpayers/businesses to move tax loss in the current year to offset profit in future years. It reduces tax payments and creates tax savings.

Net operating losses (NOLs) occur when business income is less than expenses. Under the Tax Cuts and Jobs Act (TCJA), an NOL can be carried forward indefinitely. However, it is limited to 80% of taxable net income.

Through two examples (one simple and one more complex) you will learn how Tax Loss Carryforward is used.

———————CHAPTERS———————————
00:00 - What are Tax Loss Carryforwards?
00:56 - Before the 2018 TCJA Rule
01:42 - After 2018, the Current Rule
03:07 - Who can take advantage?
04:02 - Simple Example
05:06 - Complex NOL Example

———————LINKS——————————————————-
Link to the Example in the Video:

Tax Loss CarryForward:

Loss CarryForward Explained:

#taxguide101 #akistepinska

----------------------------DISCLOSURE-------------------------------------------
The information presented in this video is for informational and educational purposes only. It is not intended to render tax advice for any specific situation. Those needing assistance with a specific situation should consult with a qualified Tax Professional.

The information in this video is based on current tax law and IRS regulations as of date of recording and is subject to change.

[TheRemnant_Fellowship]

Thank you for making this video! This just made NOLs, make way more sense! 🙏🏾

[alegc_]

Thank you! it's easy to understand with this example :)

[yashlalwani]

Concise and to the point. Nice explanation. Maybe asking for too much, but a downloadable Excel you used would have been nice. 😅

[spenn]

❤❤❤❤ I just found your channel. Please keep us the amazing work.

[peggygray]

thanks for this video - best explanation I've seen.

[shonshon]

Hi, thank you for your video. If I have an NOL that I can use this year, but this year's AGI( without including the NOL in schedule 1 in the calculation) is low enough to be completely covered by the standard deduction, is the NOL still must be used to lower the AGI even though it will not result a taxable income?

[TaxKat]

Hi Taxguide. If a partnership business is closed can the owner take the NOL carry forward to the next year and to the other non passive K1 partnership business?

[JennaJin-ssjw]

Which tax form to file to claim the net operating loss carry forward?

[ron]

5:42 I think you meant 1 million - right?