The IRS has issued guidance that instructs taxpayers with a net operating loss (NOL), consisting entirely or partly of a “farming loss,” on how to make or revoke certain elections including those made available under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
For taxpayers making the election to disregard the CARES Act provisions for farming loss NOLs, the new guidance (Rev. Proc. 2021-14) states the 80% limitation applies to determine the amount of an NOL deduction for tax years beginning in 2018, 2019 or 2020, to the extent the deduction is attributable to NOLs arising in tax years beginning after Dec. 31, 2017.
The guidance also states the CARES Act carryback provisions do not apply for NOLs arising in tax years beginning in 2018, 2019 or 2020. Read more.