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I have a NOL for my personal tax return from my 40% share of

an LLC. Can I sell...
I have a NOL for my personal tax return from my 40% share of an LLC. Can I sell that NOL to a third party? I currently have no basis in the original LLC.
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Answered in 1 minute by:
7/11/2013
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,890
Experience: 15years with H & R Block. Divisional leader, Instructor
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Robin D :

Hello and thank you for using Just Answer,
Unfortunately no. An NOL is retained by the entity that generated it. An NOL can be partially passed on by a C corp if the C corp is sold but an individual may not sell their NOL.

Robin D :

IRC Sec 172 begins the information on NOLs and IRC Section 382 is the code section which places a limitation on the use of Net Operating Losses after an ownership change.




Robin D :

The time on the NOL will continue to countdown (on the carryforward) until it unfortunately is completed.

Robin D :

I sincerely XXXXX XXXXX could advise differently.

Robin D :

But

Robin D :

Even though I know this is not the information you were hoping for, your positive rating is always thanks enough.


 

Robin D :

Customer Last Viewed Today at 2:56

Customer:

Robin,

Robin D :

Hi

Robin D :

Glad you could access and respond. Did you need more info?

Customer:

So the LLC retains the NOL, but for tax purposes only the members of the LLC can use them in their tax returns?

Robin D :

If the LLC is disregarded then yes, the shareholders or members use the NOL.

Robin D :

The individuals may not sell their portion of an NOL.

Robin D :

Section 382 prohibits use of NOLs by other parties through a change in control provision. So one is not allowed to sell the business even to someone who wants to use the NOLs.

Robin D :

I sincerely XXXXX XXXXX could advise differently.

Customer:

Thanks

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,890
Experience: 15years with H & R Block. Divisional leader, Instructor
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Robin D.
Robin D.
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Category: Tax
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