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NOL Deduction Calculator80 Percent Taxable Income Limit (IRC 172)

What does this come to under the current IRS rules?

NOL deduction limited to 80 percent of taxable income before the NOL, QBI and section 250 deductions, and the carryforward.

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Your figures
Example figuresIllustrative only. Type over them with your own.
NOL deduction
$80,000
Lesser of the NOL and 80 percent of taxable income
80 percent limit
$80,000
Taxable income after the NOL deduction
$10,000
Drawn to one scale
NOL deduction$80,000
80 percent limit$80,000
Taxable income after the NOL deduction$10,000
NOL carried forward$40,000
All results
MeasureResult
NOL deduction$80,000
80 percent limit$80,000
Taxable income after the NOL deduction$10,000
NOL carried forward$40,000
How this was worked out
Work shownrecomputed as you type
Base = taxable income before the NOL + section 199A deduction + section 250 deduction
Limit = 80% x base
NOL deduction = lesser of the NOL available and the limit
Carryforward = NOL available - NOL deduction

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

The formulas

  • Base = taxable income before the NOL + section 199A deduction + section 250 deduction
  • Limit = 80% x base
  • NOL deduction = lesser of the NOL available and the limit
  • Carryforward = NOL available - NOL deduction

How it works

For losses arising in taxable years beginning after 2017, section 172(a)(2) limits the NOL deduction to 80 percent of taxable income computed without the NOL deduction and without the section 199A and 250 deductions. Those losses carry forward without an expiration date and, with limited exceptions, are not carried back.

This tool handles the carryforward from post-2017 losses. Losses from earlier years follow different rules. Disallowed excess business loss from section 461(l) becomes part of the NOL carryover and is subject to this 80 percent limit.

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

Common questions

Can I carry a loss back?

No, except for farming losses and certain insurance company losses that section 172(b)(1) lists.

Why add back the QBI deduction?

Section 172(a)(2) computes the 80 percent base without regard to sections 199A and 250.

What if the base is zero or negative?

The limit is zero and the whole NOL carries forward.

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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