Statute of limitations does not preclude adjusting NOL carryover.

• Jurisdiction: United States
• Author: Cryan, Thomas M.
• Date: 01 November 1995

In Letter Ruling 9504032, the IRS ruled that a taxpayer may recharacterize the events of a closed year to redetermine net operating losses (NOLs) available for future years. Under the facts in the ruling, the taxpayer sustained NOLS in year 1 and in several previous years. On the year 1 tax return, the taxpayer excluded cancellation of debt (COD) income from gross income and, under Sec. 108, correspondingly reduced its NOL carryforwards by the amount of the excluded COD income. In year 5, after the general statute...