[20180108]IN10846_P、 L.115-97 净营业损失.pdf

CRS INSIGHT Prepared for Members and Committees of Congress INSIGHTINSIGHTi i P.L. 115-97: Net Operating Losses nae redacted Specialist in Economics January 8, 2018 The 2017 tax revision (P.L. 115-97) enacted on December 22, 2017, made significant changes to the federal tax system, including changes to the tax treatment of business net operating losses (NOLs). This Insight provides an overview of the tax treatment of NOLs that existed before the enactment of P.L. 115-97 and the treatment of losses going forward as a result of the 2017 revision. What Is an NOL? A business incurs an NOL when its deductions exceed its gross income, or, put differently, when a businesss taxable income is negative. The year in which the NOL is realized is referred to as a “loss year.” A business has no tax liability in a loss year. Additionally, an NOL may be used to reduce taxes in non-loss years. 2017 Law Tax law in 2017 allowed businesses to use an NOL to obtain a refund for taxes paid in prior years or to reduce taxes owed in the future. Using an NOL to obtain a refund for past taxes paid is known as carrying back a loss, whereas using an NOL to reduce future taxes owed is known as carrying forward