NOL Carrybacks to Increase Cash Flow


Are you looking for a way to increase your cash flow in a troubled economy? Well, look no further -- The Federal government is here to help. One of the favorable changes that the Obama administration made to the tax code was to allow for a five, rather than the previous two, year carryback of net operation losses.

What does this mean to you? If you had a loss from your business in 2008, and had income in any of the previous 5 years, you may be eligible for the 5 year net operating loss carryback provisions. These provisions allow you to make a request for a refund, by carrying back your losses to the income years. How long does this take? Not long. We have averaged a turn around of about 2 to 3 months for most refund requests. The Treasury has issued regulations that have clarified many of the issues that come up when requesting a refund. Some of the issues can be complicated, but a tax advisor well versed in this area should be able to lead you through it. Best of all, the refund is not taxable income.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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