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Excess Business Loss Calculator for 2026 (IRC 461(l))

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

Excess business loss over the $256,000 or $512,000 threshold, the business loss allowed this year and the amount carried as an NOL.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Excess business loss (disallowed)
$144,000
Applied after the passive activity rules
Business loss allowed this year
$256,000
Net business loss before the limit
$400,000
Drawn to one scale
Excess business loss (disallowed)$144,000
Business loss allowed this year$256,000
Net business loss before the limit$400,000
Threshold amount for 2026$256,000
All results
MeasureResult
Excess business loss (disallowed)
Carried forward as a net operating loss
$144,000
Business loss allowed this year$256,000
Net business loss before the limit$400,000
Threshold amount for 2026$256,000
How this was worked out
Work shownrecomputed as you type
Excess business loss = business deductions - (business gross income and gain + threshold)
Threshold 2026: $256,000 ($512,000 joint)
Allowed loss = net business loss - excess business loss

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

The formulas

  • Excess business loss = business deductions - (business gross income and gain + threshold)
  • Threshold 2026: $256,000 ($512,000 joint)
  • Allowed loss = net business loss - excess business loss

How it works

Section 461(l) disallows a noncorporate taxpayer's business losses above a threshold. For 2026 the threshold is $256,000, or $512,000 on a joint return, per Rev. Proc. 2025-32. The disallowed excess becomes a net operating loss carryforward.

The limit applies after section 469, so passive loss limits come first. The 2025 amendments removed the end date, so the limit is permanent.

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

Common questions

Where does the disallowed loss go?

Section 461(l)(2) treats it as a net operating loss carryover to the next year.

Does the 80 percent NOL limit apply to the carryover?

Yes. Use the NOL deduction tool to see the limit when the carryover is used.

Is the threshold indexed?

Yes, under section 461(l)(3)(C). The 2026 amounts come from Rev. Proc. 2025-32.

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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