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MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2342
Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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C Corporation has $90 Million net operating loss carryforward

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C Corporation has $90 Million net operating loss carryforward from years 1998 through 2011.

The corporation is subject to annual section 382 limitation. The change in ownership occured at the end of 2011

The annual section 382 limitation is calculated to be $49,700. ($1.4M value of loss corporation immediately before ownership change X federal long term tax-exempt rate of 3.55%)

In regard to reporting net operating loss carryforward for line 29a of Form 1120, should the prior years individual NOLs be adjusted to $49,700 each?
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Only the allowed loss ($49,700) is reported on Form 1120, Line 29a. In addition, a statement must be attached to the return showing the full NOL carryover and the calculation of the allowed amount. See Form 1120 instructions, page 14. Link below.
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