Net Operating Losses

News & Analysis as of

Using A Rights Plan to Protect Your NOL Assets

Traditional rights plans are adopted to protect companies against hostile takeover actions. However, in the current distressed environment, where energy stock prices have plunged and many companies have incurred significant...more

SEC Files Complaint Against Former Bank Executives, Alleges Fraudulent Reporting of Loan Losses

On January 13, the SEC filed a complaint against 11 former executives and board members of an Alabama-based federal savings bank and its holding company for allegedly participating in various schemes to mislead investors and...more

MoFo New York Tax Insights - Volume 6, Issue 12

NYC Tribunal Rejects Claim That First Amendment Requires Use of Audience Factor for Sourcing Receipts from Credit Ratings - The New York City Tax Appeals Tribunal, reversing an Administrative Law Judge decision, has held...more

Pennsylvania Net Operating Losses Uncapped by Commonwealth Court

On November 23, 2015, the Pennsylvania Commonwealth Court held that the net operating loss carryover limitations imposed by the Pennsylvania corporate net income tax statutes violated the Uniformity Clause of the Pennsylvania...more

PA Commonwealth Court Holds NOL Tax Deduction Cap is Unconstitutional, Creating Potential Refund Opportunities

The Pennsylvania Commonwealth Court unanimously held in a 7-0 decision that Pennsylvania's net operating loss (NOL) cap that limits a corporation's ability to deduct NOL carryforwards for corporate net income tax (CNIT)...more

Pennsylvania Commonwealth Court Declares Corporate Net Income Tax Net Operating Loss Scheme Unconstitutional

Taxpayers that are in a positive net operating loss carryover position, but that paid tax in any open year due to the statutory scheme, should file protective refund claims seeking a refund for any overpaid tax....more

Give Thanks and File Your Pennsylvania Net Loss Carryover Deduction Refund Claims!

In a decision sure to give Pennsylvania legislators and the Department of Revenue indigestion before their big Thanksgiving meals, the Commonwealth Court held that Pennsylvania’s net loss carryover (NLC) deduction cap...more

Pennsylvania’s Commonwealth Court Finds NOL Cap Unconstitutional, Grants Refund to Taxpayer

In a 5–2 decision, the Pennsylvania Commonwealth Court in an en banc panel has held that Pennsylvania’s NOL cap violates the Uniformity Clause of the Pennsylvania Constitution, and granted the taxpayer (Nextel Communications...more

California Enacts Federal Conformity Bill

The governor of California has signed AB 154, which selectively conforms the California Revenue and Taxation Code to specified provisions of the Internal Revenue Code enacted as of January 1, 2015. This is a significant...more

Pennsylvania’s NOL Cap—There’s Still Time to File a 2011 Refund Claim (and It’s Easy!)

There is ongoing litigation over whether Pennsylvania’s NOL cap is unconstitutional. Many taxpayers have already filed protective refund claims to preserve their rights in the event the cap is found unconstitutional. If you...more

ISS Commences 2016 Proxy Voting Policy Survey

ISS has commenced its 2016 proxy voting policy survey. Some of the issues ISS seeks comment on include: - Is it appropriate to use non-GAAP or adjusted GAAP metrics for compensation programs? - What types of equity...more

Pennsylvania Tax Developments - A Reed Smith Quarterly Update: July 2015

This is a brief update on recent Pennsylvania tax developments. Amended Return “Trap”—Court Holds That Amended Return Was Not a Petition for Refund; Possible Legislative Fix? - On June 9, the Commonwealth Court issued a...more

Pennsylvania’s NOL Cap Litigation Moving Forward

In a Corporate Net Income Tax (“CNI”) appeal filed by Nextel Communications of the Mid-Atlantic, Inc. (“Nextel”), the Commonwealth Court will consider whether Pennsylvania’s statutory cap on net operating loss (“NOL”)...more

Inside the New York Budget Bill: 2015 – 2016 Budget Legislation

In This Issue: - Technical Correction .. Economic Nexus .. Tax Base and Income Classifications .. Tax Rates and Qualified New York Manufacturers .. Apportionment .. Combined Reporting .. Net...more

Preserving Net Operating Losses (NOL) Carryforward: What Are You Doing to Protect Your Company’s Valuable Tax Assets?

A company’s past NOLs can be used to offset taxable income in future years, subject to certain limitations. For companies that have operated at a significant loss and expect to turn a profit in the foreseeable future, the...more

Inside the New York Budget Bill: Net Operating Losses and Investment Tax Credit

The New York Legislature has passed bills related to the 2015–2016 budget (S2009-B/A3009-B and S4610-A/A6721-A, collectively referred to herein as the Budget Bill) containing several significant “technical corrections” to the...more

Global Tax News - March 2015

Australia's Investment Management Regime reforms 30 MAR 2015 - Australia’s Investment Management Regime (IMR) reforms, initially proposed by the Australian Financial Centre Forum in the Johnson Report in 2009 and the...more

Germany's safe harbors to its net operating loss carryover limitation rules – or: let's make a law

Historically – meaning until the end of 2007 – the German corporate tax law provided for limitation rules on the use of tax-wise net operating loss carryovers of a corporation, where the "loss corporation," after a change in...more

IRS Releases First Private Letter Ruling on Small Redemption Limitation

On October 21, 2013, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) issued Final Treasury Regulations to provide relief under Section 382 for small redemptions. These regulations provide taxpayer...more

ALJ: New York NOL Deduction Does Not Apply When Tax Is Not Paid on Income Base

A New York State Division of Tax Appeals administrative law judge (ALJ) recently determined that a banking corporation was not required to hypothetically use a net operating loss (NOL) deduction to decrease its entire net...more

Banking Corporation Not Required to Hypothetically Use New York NOL Deduction When Tax Is Paid on Asset Base

A New York State Division of Tax Appeals administrative law judge (ALJ) recently ruled in Matter of TD Holdings II, Inc., DTA No. 825329 (N.Y. Div. Tax App. Jan. 22, 2015), that a banking corporation is not required to...more

Budget Negotiations and Business Tax Issues Likely to Impact Pennsylvania Employers Amid Fiscal Crisis

Pennsylvania’s employers need to pay close attention to the developing fiscal crisis confronting Pennsylvania policy makers in the months ahead. None of Pennsylvania’s major industries should conclude that they are protected...more

Frequently Forgotten Divorce Asset: Loss Carry-Forwards

Loss carry-forward is a frequently forgotten asset in divorces. Whether the loss arises from the operation of a business (Net Operating Loss) or sale of stocks (capital loss), it is a valuable asset which may be used to...more

IRS Issues a Field Service Advice on AMT NOL Ordering Rules

Section 172(b)(1)(A) provides that Net Operating Losses (NOLs) may generally be carried back two years and carried forward 20 years. The alternative minimum tax NOL cannot exceed 90 percent of alternative minimum taxable...more

Indiana Supreme Court Refuses To Apply A Company’s Foreign Source Dividend Deduction To Its NOL Calculations

On August 25, 2014, the Indiana Supreme Court issued its decision in Indiana Department of State Revenue v. Caterpillar, Inc., holding that the plain meaning of the Indiana tax statutes prohibited the company from increasing...more

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