Section 12 Net Operating Loss Addback

• Library: Tax Law 2009

In addition to bonus depreciation, the Job Creation
and Worker Assistance Act of 2002, Pub. L. No. 107-147, 116 Stat. 21, included a provision that changed the federal net operating loss deduction under I.R.C. § 172. The 2002 federal law gives taxpayers the option to extend the carryback period of their losses from two years to five years. I.R.C. § 172(b)(1)(H). This federal law applies only to net operating losses for taxable years ending during 2001 or 2002.

After considering the potential loss of Missouri tax revenue that could result from this federal change, the Missouri legislature passed a...