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Year NOL

NOL

Carryover

Type of NOL and Description (continued)

incurred

carried over

period

Eligible Small Business (ESB)

Income

Get Legal Ruling 96-5 for more information.

years

beginning

100%

5 Years

Incurred in a trade or business activity that has gross receipts, less returns and allowances, of less than $1 million during the

on or after

income year.

1/1/94

100% of an NOL may be carried over, but only to the extent of the net loss from the eligible small business. If a taxpayer’s NOL

exceeds the net loss from an eligible small business, the excess may be carried over at 50% as a general NOL.

The corporation should use the same SIC Code division classifications described in the new business NOL section to determine what

constitutes a trade or business activity.

Title 11 Bankruptcy (T11)

1987-1993

50%

10 Years

If the corporation is claiming an NOL carryover deduction under the provisions of R&TC Section 24416(e)(4)(A), enter the carryover

amount on Side 1, Part II, line 2.

Disaster Losses (DIS)

See list

100%

5 Years

Casualty losses in areas of California declared by the President of the United States or the Governor of California to be in a state of

in the

50%

10 Years

disaster.

Instructions

An election may be made under IRC 165(I) permitting the disaster loss to be taken against the previous year’s income. If you made

for Part II

this election, see current year NOLs, Part II, line 3. If special legislation is enacted under R&TC Section 24347.5 and the specified

disaster loss exceeds income in the year it is claimed, 100% of the excess may be carried over for up to 5 income years. If any excess

loss remains after the 5-year period, 50% of that remaining loss may be carried over for up to 10 additional incomes years.

Specific Line Instructions

Prior Year NOLs

Column (c) – Enter the type of NOL from the table in

General Information F, Types of NOLs. If using an EDA

Column (a) – Enter the year the loss was incurred.

NOL, get the applicable form for the NOL type.

Part I

Column (b) – If the loss is due to a disaster, enter the

Column (d) – Enter the amount of the initial loss for the

disaster code from the list below. If the loss is from a new

Use Part I of this form to figure the current year NOL

year given in column (a).

business or eligible small business, enter the SIC Code for

eligible for carryover.

the new business or eligible small business from the

Column (e) – Enter the carryover amount from the 1998

Line 2 – If the corporation incurred a disaster loss during

Standard Industrial Classification Manual. DO NOT enter

form FTB 3805Q, Part II, column (h).

1999, enter the amount of the loss on this line. Enter as a

the code from the PBA chart available in the 1999

Column (f) – Enter the smaller of the amount in

positive number.

Form 100 or Form 100S booklets. If the loss was from an

column (e) or the amount in column (g) of the previous

Line 3 – If the amount is zero or less, the corporation

S Corporation, enter the entity’s federal employer

line.

does not have a current year general NOL. Go to Part II for

identification number from Schedule K-1 (100S).

Column (g) – Enter the result of subtracting column (f)

computation of general NOL carryovers, the current year

Following is a list of events that have been declared

from the balance in column (g) of the previous line.

disaster loss, and carryover from disaster losses.

disasters:

Column (h) – Subtract the amount in column (f) from the

Line 7 – Go to Part II, Current Year NOLs, to record your

amount in column (e) and enter the result.

Year

Code Event

1999 NOL carryover to 2000. Complete columns (b), (c),

1999

Wildfires and other related casualties*

(d), and (h) only, for each type of loss that you incurred.

Current Year NOLs

1999

Winter Freeze 98/99

If you have a eligible qualified new business or a small

Line 3, Column (d) – Enter your 1999 disaster loss from

1998

business and your NOL is greater than the amount of net

Part I, line 2. If you did not elect to deduct your disaster

1998

El Niño 98

loss from such a business, use the general NOL first. If

loss in the prior year:

1997

Disaster floods 96/97

you operate one or more new businesses and one or more

1996

• In column (f), enter the disaster loss used in 1999.

eligible small businesses, determine the amount of the

1996

Firestorms 96*

• In column (h), enter column (d) less column (f).

loss attributable to the new business(es), the small

1995

Storms, flooding, and other related casualties

If you elected to deduct your 1999 disaster loss on your

business(es), and the general NOL in the following

1994

San Luis Obispo fire and other related casualties

1998 return, and you have an excess amount to be carried

manner. The NOL is first treated as a new business NOL to

1994

Los Angeles, Orange, and Ventura County earthquake

over to 1999, enter the carryover amount from your 1998

and other related casualties

the extent of the loss from the new business. Any

form FTB 3805Q, Part II, line 3, column (h), in Part II,

1993

Storms, floods, and other related casualties

remaining NOL is then treated as an eligible small

line 2, column (e). Use the Prior Year NOL instructions for

1992

Wildfires and other related casualties in Calaveras and

business NOL to the extent of the loss from the eligible

Shasta Counties

column (a) through column (h) except:

small business. Any further remaining NOL is treated as an

1992

San Bernardino County earthquake and other related

NOL under the general rules.

• In column (a), enter 1999;

casualties

• In column (b), enter 19 or 20; and

Part II

1992

Riots, arson, and related casualties in California during

• In column (d), enter the total disaster loss incurred in

April and May

Use Part II to limit current year disaster loss and loss

1999.

1992

Humboldt County earthquake and related casualties

carryover deductions to current year income and to record

1992

Storms, floods, and other related casualties

all of the corporation’s loss carryover information.

1991

Oakland/Berkeley fire and other related casualties

1990

Santa Barbara fires and other related casualties

If the corporation has losses from more than one source

1989

Bay Area earthquake and other related casualties

and/or more than one category, the corporation must

1987

Forest fires, October earthquake, and other related

compute the allowable NOL carryover for each loss

casualties

separately.

1986

Storms, floods, and other related casualties

When to use an NOL carryover

1985

Forest fires and related casualties occurring in

California

Use your NOLs in the order the losses were incurred.

*Carryover period limited to 5 years at 50%. No special legislation

There is no requirement to deduct NOL carryovers before

was enacted.

disaster loss carryovers.

Page 2 FTB 3805Q 1999

Instructions For Form Ftb 3805q - Net Operating Loss (Nol) Computation And Nol And Disaster Loss Limitations - Corporations - 1999 Page 2

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