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charitable organizations that conduct

(see Waiving the carryback period

period and instead carry the NOL

lobbying activities, see the

on page 13). For exceptions to the

forward to years following the year of

instructions for line 19. For more

general rule, see Special carryback

the loss. To make this election, check

information on lobbying expenses,

periods for certain losses on page

the box in item 19 on Schedule N.

see section 162(e).

13. Enter on line 29a, the total NOL

The return must be timely filed

carryovers from prior tax years, but

(including extensions).

Line 28

do not enter more than the

Special carryback periods for

Taxable income before NOL

cooperative's taxable income (after

certain losses. The regular 2 or

deduction and special deductions

special deductions). An NOL

3-year carryback period generally

At-risk rules. Special at-risk rules

deduction cannot be taken in a year

does not apply to the following losses.

under section 465 generally apply to

in which the cooperative has negative

Specified liability losses,

closely held cooperatives (see

taxable income. Attach a schedule

including a product liability loss. The

Passive activity limitations on page

showing the computation of the NOL

part of an NOL that is attributable to

8) engaged in any activity as a trade

deduction. Also complete item 20 on

a specified liability loss may be

or business or for the production of

Schedule N.

carried back 10 years. The

income. These cooperatives may

For details on the NOL deduction,

cooperative may, however, elect to

have to adjust the amount on line 28,

see Pub. 536, Net Operating Losses.

treat such a loss as if it were not a

Form 990-C. The at-risk rules do not

Carryback and carryover rules. To

specified liability loss. If the

apply to the following:

carry back the loss and obtain a quick

corporation makes this election, the

Holding real property placed in

refund of taxes, use Form 1139,

loss carryback period will be 2, 3, or

service by the cooperative before

Corporation Application for Tentative

5 years, whichever applies. Make the

1987;

Refund. Form 1139 must be filed

election by attaching a statement to

Equipment leasing under sections

within 12 months after the close of the

a timely filed return including

465(c)(4), (5), and (6); and

tax year of the loss. See section 6411

extensions. However, see Exception

for details. Do not attach Form 1139

below. Also see section 172(b)(1)(C).

Any qualifying business of a

to the cooperative's income tax

qualified cooperative under section

Farming losses. An NOL

return. Mail it in a separate envelope

465(c)(7).

attributable to any farming business

to the service center where the

However, the at-risk rules do apply

may be carried back 5 years.

cooperative files its income tax return.

However, the cooperative may elect

to the holding of mineral property.

For carryback claims filed later than

to treat the loss as if it were not a

If the at-risk rules apply, adjust the

12 months after the close of the tax

farming loss. If the cooperative makes

amount on this line for any section

year of the loss, file an amended

this election, the loss carryback

465(d) losses. These losses are

Form 990-C, instead of Form 1139.

period will be 2 or 3 years, whichever

limited to the amount for which the

applies. Make the election by

After the cooperative has applied

cooperative is at risk for each

attaching a statement to a timely filed

the NOL to the first tax year to which

separate activity at the close of the

return (including extensions,

tax year. If the cooperative is involved

it may be carried, the taxable income

however, see Exception ). Also see

of that year is modified (as described

in one or more activities, any of which

section 172(b)(1)(G) and 172(i)

in section 172(b)) to determine how

incurs a loss for the year, report the

much of the remaining loss may be

Exception. If the cooperative timely

losses for each activity separately.

carried to other years. See section

Attach Form 6198, At-Risk

filed its return for the loss year without

172(b) and the related regulations for

making the election (see Specified

Limitations, showing the amount at

details.

risk and gross income and deductions

liability losses or Farming losses

above), the cooperative may still

for the activities with the losses.

Special NOL rules apply when:

make the election by filing an

If the cooperative sells or otherwise

An ownership change occurs (i.e.,

amended return within 6 months of

disposes of an asset or its interest

the amount of the taxable income of

the due date of the loss year return

(either total or partial) in an activity to

a loss cooperative that can be offset

(excluding extensions). Attach the

which the at-risk rules apply,

by pre-change NOL carryovers is

election to the amended return and

determine the net profit or loss from

limited). See section 382 and the

write “Filed pursuant to section

the activity by combining the gain or

related regulations. Also see

301.9100-2” on the election

loss on the sale or disposition with the

Temporary Regulations section

statement. File the amended return

profit or loss from the activity. If the

1.382-2T(a)(2)(ii), which requires that

at the same address the original

cooperative has a net loss, it may be

a loss cooperative file an information

return was filed. Once made, the

limited because of the at-risk rules.

statement with its income tax return

election is irrevocable.

Treat any loss from an activity not

for each tax year that it is a loss

Eligible losses.The part of an NOL

cooperative and certain shifts in

allowed for the tax year as a

that is attributable to an eligible loss

deduction allocable to the activity in

ownership occurred. Also see

may be carried back 3 years. An

Regulations section 1.382-6(b) for

the next tax year.

“eligible loss” is an NOL attributable

details on how to make the

Line 29a. NOL deduction. A

to a Presidentially declared disaster

closing-of-the-books election.

cooperative may use the net

if, for the tax year in which the NOL

A cooperative acquires control of

operating loss (NOL) incurred in 1 tax

arose, the cooperative was (a)

another cooperative (or acquires its

year to reduce its taxable income in

engaged in a farming business or (b)

assets in a reorganization) and the

another year. Generally, a

a small business that met the gross

amount of pre-acquisition losses that

cooperative may carry an NOL back

receipts test of section 448(c). An

may offset recognized built-in gains is

to each of the 2 years, preceding the

eligible loss does not include any

limited. See section 384.

year of the loss and then carry any

farming loss or specified liability loss

remaining amount over to each of the

Waiving the carryback period. A

described above.

20 years (15 years for NOLs incurred

cooperative may make an irrevocable

in tax years beginning before August

election to forego the carryback

6, 1997), following the year of the loss

Page 12

Instructions For Form 990-C - Farmers' Cooperative Association Income Tax Return - 2000 Page 12

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