NOLs, Carryback Claims, and Amended Returns: Maximizing Benefits of the CARES Act

Amending Returns for QIP, 163(j), 461(l), Section 965 Transition Payments, and New IRS Procedures

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A


Conducted on Tuesday, August 11, 2020

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will discuss 2020 planning opportunities in light of recent CARES Act relief for net operating losses (NOLs), including carryback claims, amending returns, and handling new IRS submission procedures. Our authoritative panel will cover how to file for relief to best benefit from tax-saving changes made to 163(j), QIP, 461(l), and revived NOL carrybacks.

Description

The CARES Act provides a five-year carryback of net operating losses (NOLs) generated in the years 2018-2020. Although years 2018-2019 have passed, we are in the midst of 2020, which opens up opportunities to plan into NOLs and free up much-needed cash for individuals and businesses. Maximizing depreciation and carrying back losses to free up unused credits can provide significantly needed cash for struggling businesses.

In addition to reviving the NOL carryback, the CARES Act and other recent rulings have given taxpayers numerous ways to generate additional losses. New Section 163(j) in the Tax Cuts and Jobs Act of 2017 capped the deduction for business interest expense at 30% of adjusted taxable income. This limitation has been increased to 50% for tax years 2019 and 2020. The long-awaited correction to the life of qualified improvement property (QIP) was included in the act as well.

Although the addition of the NOL carryback is welcomed, it is also mandatory unless waived. Some individuals and businesses may find it advantageous to forego the carryback period despite the ability to carryback NOLs to a higher tax rate environment. Taxpayers making Section 965 transition payments have further considerations since they can elect to exclude 965(a) inclusion years from the carryback period. Understanding when and how to forego the carryback is essential for tax professionals working with taxpayers with losses.

Listen as our panel of NOL experts explains the new IRS procedures for submitting carryback claims, how and when to file a carryback claim, planning opportunities available based on recent relief, and best practices for preparing amended returns.

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Outline

  1. NOL modifications made by the CARES Act
  2. Reasons to amend
  3. 461(l) deferral
  4. QIP
  5. 163(j)
  6. Considerations
    A. Forgoing the carrybacks
    B. Section 965 liability
  7. Applications for tentative refunds
    A. New IRS procedures
    B. Form 1045
    C. Form 1139
  8. Planning opportunities

Benefits

The panel will discuss these and other critical issues:

  • New IRS procedures for handling carryback claims
  • Situations where it is preferable to waive the NOL carryback period
  • Which returns should be amended to incorporate the QIP life correction
  • Considerations for taxpayers making Section 965 transition payments

Faculty

Ainsworth, Kevin
Kevin Ainsworth

Managing Director, National Tax Office
BDO USA

Mr. Ainsworth has over 12 years of experience in corporate taxation, including significant experience with software and...  |  Read More

Pliskin, Nathan
Nathan D. Pliskin

Senior Manager, Tax
Mazars USA

Mr. Pliskin has a broad-based tax consulting practice, advising corporations, private equity funds, S corporations and...  |  Read More

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