• Tax loss carryforward allows taxpayers to use a taxable loss in the current period and apply it to a future tax period.

  • Capital losses that exceed capital gains for the year may be used to offset normal taxable income of up to $3,000 in any future tax year indefinitely until exhausted.
  • Net operating losses (NOL), losses incurred in the course of doing business can be carried forward indefinitely under the Tax Cuts and Jobs Act (TCJA); however, they are limited to 80% of taxable income in the year the transfer is used.
  • Prior to TCJA, NOL could be carried forward 20 years or two years backward without a dollar limit up to the amount of taxable income in the year that the forward or backward was used.
  • The CARES Act of 2020 further changed the rules regarding NOL for tax years 2018 to 2020.