COVID-19: The IRS provides guidelines for taxpayers with net operating losses
The IRS has made an announcement, under the CARES Act, to provide tax relief for taxpayers with net operating losses. This is deemed as more effort to curb the inevitable COVID-19 economic fallout which is threatening millions of Americans’ jobs.
Under these guidelines, the IRS says that;
- This is for taxpayers with net operating losses that are carried back under the CARES Act
- The procedures are for;
- Waiving the carryback period in the case of a net operating loss arising in a taxable year beginning after December 31, 2017, and before January 1, 2021,
- Disregarding certain amounts of foreign income subject to transition tax that would normally have been included as income during the five-year carryback period, and
- Waiving a carryback period, reducing a carryback period. Or revoking an election to waive a carryback period for a taxable year that began before January 1, 2018, and ended after December 31, 2017.
- Over and above the above-stated, the IRS has, in Notice 2020-26, granted a six-month extension of time to file Form 1045 or Form 1139, as applicable, with respect to the carryback of a net operating loss that arose in any taxable year that began during the calendar year 2018 and that ended on or before June 30, 2019.
- This applies to individuals, trusts, estates, and corporations.
Having trouble understanding what to do with the above information? Do not hesitate to give us a call for a quick tax chat. One of our team members will give you some important pointers.
Ps: If you have a question about what is happening? And what needs to be done get Coronavirus Stimulus check. Go to our Coronavirus FAQ: The Cares Act. Don’t forget that we can help you file your taxes! Have a Free Quick tax Chat with your Dave Ramsey Endorsed Tax Accountant
