
Farmers are allowed to carryback a net operating loss either two or five years. But timeout. Congress and President Biden would like to go back to the old rules a ...
The CARES Act passed last year allowed all taxpayers to carryback their net operating losses (NOL) five years. This change was effective for years 2018-2020. It also suspended the Excess Business Loss (EBL) rules until 2021.
The Consolidated Appropriations Act (CAA) allowed farmers to either carry back net operating losses two or five years or elect to carry them forward.
The HEROES Act proposed by the House right after the CARES Act had a provision to undo the CARES Act changes. Since it now almost a year since the CARES Act was enacted everyone thought this had been put to bed.
Time-out. It appears that the Democrats really do not like NOL carrybacks. They view these as only going to rich taxpayers so now they are proposing to eliminate the ability to carry back NOLs and the changes to the EBL.
The key question is whether this will be applied prospectively or retroactively. If it is done retroactively and you filed for a five year NOL carryback, you may have to redo the carryback to the original two year carryback.
What a mess. We will keep you posted if this gets enacted.
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