Resident persons; net operating loss; adjusted gross income
Sec. 2.5. (a) This section applies to a resident person.
(b) Resident persons are entitled to a net operating loss deduction.
The amount of the deduction taken in a taxable year may not exceed
the taxpayer's unused Indiana net operating losses carried back or
carried over to that year.
(c) An Indiana net operating loss equals the taxpayer's federal net
operating loss for a taxable year as calculated under Section 172 of
the Internal Revenue Code, adjusted for the modifications required
by IC 6-3-1-3.5.
(d) The following provisions apply for purposes of subsection (c):
(1) The modifications that are to be applied are those
modifications required under IC 6-3-1-3.5 for the same taxable
year in which each net operating loss was incurred.
(2) An Indiana net operating loss includes a net operating loss
that arises when the modifications required by IC 6-3-1-3.5
exceed the taxpayer's federal adjusted gross income (as defined
in Section 62 of the Internal Revenue Code) for the taxable year
in which the Indiana net operating loss is determined.
(e) Subject to the limitations contained in subsection (g), an
Indiana net operating loss carryback or carryover shall be available
as a deduction from the taxpayer's adjusted gross income (as defined
in IC 6-3-1-3.5) in the carryback or carryover year provided in
subsection (f).
(f) Carrybacks and carryovers shall be determined under this
subsection as follows:
(1) An Indiana net operating loss shall be an Indiana net
operating loss carryback to each of the carryback years
preceding the taxable year of the loss.
(2) An Indiana net operating loss shall be an Indiana net
operating loss carryover to each of the carryover years
following the taxable year of the loss.
(3) Carryback years shall be determined by reference to the
number of years allowed for carrying back a net operating loss
under Section 172(b) of the Internal Revenue Code.
(4) Carryover years shall be determined by reference to the
number of years allowed for carrying over net operating losses
under Section 172(b) of the Internal Revenue Code.
(5) A taxpayer who makes an election under Section 172(b)(3)
of the Internal Revenue Code to relinquish the carryback period
with respect to a net operating loss for any taxable year shall be
considered to have also relinquished the carryback of the
Indiana net operating loss for purposes of this section.
(g) The entire amount of the Indiana net operating loss for any
taxable year shall be carried to the earliest of the taxable years to
which (as determined under subsection (f)) the loss may be carried.
The amount of the Indiana net operating loss remaining after the
deduction is taken under this section in a taxable year may be carried
back or carried over as provided in subsection (f). The amount of the
Indiana net operating loss carried back or carried over from year to
year shall be reduced to the extent that the Indiana net operating loss
carryback or carryover is used by the taxpayer to obtain a deduction
in a taxable year until the occurrence of the earlier of the following:
(1) The entire amount of the Indiana net operating loss has been
used as a deduction.
(2) The Indiana net operating loss has been carried over to each
of the carryover years provided by subsection (f).
As added by P.L.91-1987, SEC.3. Amended by P.L.81-2004, SEC.10.
Last modified: May 28, 2006