9
A. Ten-Year Net Operating Loss Carryback for Specified
Liability Losses
1. Ten-Year Net Operating Loss Carryback
Generally, a taxpayer may carry a net operating loss back 3
years before the loss year and forward 15 years after the loss
year. Sec. 172(b)(1)(A). However, a taxpayer that has a
specified liability loss under section 172(f) may carry that loss
back to each of the 10 tax years preceding the loss year. Sec.
172(b)(1)(C).
This 10-year carryback includes product liability and tort
losses and nuclear decommissioning expenses. Sec. 172(f)(1),
(3). The 10-year carryback was enacted for product liability
losses in 1978. Sec. 172(j); Revenue Act of 1978, Pub. L. 95-
600, sec. 371(b), 92 Stat. 2859. It was extended to specified
liability and tort liability losses and costs of decommissioning
nuclear power plants (section 172(k)) in 1984. Deficit Reduction
Act of 1984 (DEFRA), Pub. L. 98-369, sec. 91(d)(2), 98 Stat.
606.3
3The Revenue Reconciliation Act of 1990, Pub. L. 101-508,
sec. 11811(b)(1), 104 Stat. 1388-532, combined sec. 172(j)
(relating to product liability losses) and sec. 172(k) (relating
to deferred statutory or tort liability losses and nuclear
decommissioning costs) and redesignated them as sec. 172(f)
(providing rules relating to specified liability losses),
effective for net operating losses for tax years beginning after
1990.
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Last modified: May 25, 2011