Issue link: https://mbozikis.ufcontent.com/i/1422521
183 up to 100% of a corporation's taxable income (subject to a 90% limitation on the ability to offset alternative minimum taxable income). The 2017 Tax Act generally eliminates the ability of a corporation to carryback post-2018 NOLs, but extends the carryforward period for those NOLs indefinitely. However, post- 2018 NOLs can only offset up to 80% (instead of 100%) of a corporation's taxable income in any taxable year (replacing the prior limitation imposed for alternative minimum tax purposes). Temporary Relief from these restrictions on the use of NOLs was provided by the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"). Under the CARES Act, loss corporations with NOLs arising in the 2018, 2019 and 2020 tax years are permitted to carry those NOLs back for five years. This change applies retroactively, and as a result, corporations recognizing losses during any of those three years, but with taxable income during the five years preceding the loss year, will be able to file amended returns and get refunds of the taxes paid in the prior profitable years. Additionally, the CARES Act temporarily suspends the 80% offset limitation. For taxable years before January 1, 2021, taxpayers will be able to offset 100% of their taxable income with NOLs incurred in prior and subsequent years. The value of an NOL depends not only on its size, but also upon the amount and timing of the income that the NOL offsets. Because the U.S. government would prefer that the benefit of an NOL remain with the owners of the corporation that suffered the loss, Section 382(a) of the Internal Revenue Code imposes an additional restriction that is designed in part to limit the amount of income that can be offset by an NOL following a 50% change in stock ownership (an "Ownership Change"). An Ownership Change is measured over a rolling three-year period and generally takes into account only the ownership of persons (or groups of related persons) holding 5% or more of the corporation's stock. Ordinarily, the amount of a NOL that can be used against taxable income of a loss corporation following an Ownership Change is limited to the product of the net equity value of the corporation's stock immediately before the Ownership Change and