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Excess Business Loss Calculator (Section 461(l)), 2026 Threshold

What do these figures come to once the work is shown?

Business loss allowed and the excess business loss that becomes an NOL carryforward, using the 2026 threshold of $256,000 ($512,000 joint).

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Your figures
Example figuresIllustrative only. Type over them with your own.
Excess business loss (disallowed, becomes NOL)
$144,000
Disallowed now and carried as an NOL
Business loss allowed this year
$256,000
Net business loss
$400,000
Drawn to one scale
Excess business loss (disallowed, becomes NOL)$144,000
Business loss allowed this year$256,000
Net business loss$400,000
2026 threshold$256,000
All results
MeasureResult
Excess business loss (disallowed, becomes NOL)$144,000
Business loss allowed this year$256,000
Net business loss$400,000
2026 threshold
Rev. Proc. 2025-32 section 4.31
$256,000
How this was worked out
Work shownrecomputed as you type
Net business loss = business deductions - business gross income
Excess business loss = max(0, net business loss - threshold)
2026 threshold = $256,000, or $512,000 on a joint return

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Net business loss = business deductions - business gross income
  • Excess business loss = max(0, net business loss - threshold)
  • 2026 threshold = $256,000, or $512,000 on a joint return

How it works

Section 461(l) disallows an excess business loss for a noncorporate taxpayer: the amount by which business deductions exceed business gross income plus a threshold. For 2026 the threshold is $256,000, or $512,000 on a joint return.

The disallowed amount is treated as a net operating loss in the next year, where it is subject to the 80 percent taxable income limit. Section 70601 of Pub. L. 119-21 struck the end date, so the rule is permanent for taxable years after 2026, and for taxable years beginning after 2025 it indexes the $250,000 and $500,000 base amounts from 2024.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Is wage income counted?

No. Deductions and income from employment are left out of the computation.

What happens to the disallowed amount?

It is treated as a net operating loss for the next taxable year.

Are other loss limits applied?

No. This tool starts from the business deductions and income you enter and applies only the section 461(l) rule.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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