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Year NOL

NOL

Carryover

Type of NOL and Description (continued)

Incurred

Carried Over

Period

Eligible Small Business (ESB) Get Legal Ruling 96-5 for more information.

Income

Years

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

Beginning

100%

5 Years

the income year.

on or After

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

1/1/94

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 tests described in the new business NOL section to group trade or

business activities for the eligible small business NOL.

Title 11 Bankruptcy (T11)

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

1987-1993

50%

10 Years

carryover amount on Side 1, Part II, line 2.

Disaster Losses (DIS)

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

See list

100%

5 Years

in a state of disaster.

in the

50%

10 Years

Instructions

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

for Part II

If you made 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 income years.

Specific Line Instructions

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

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

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

the year given in column (a).

from a new business or eligible small business, enter

Part I

Column (e) – Enter the carryover amount from the

the SIC Code for the new business or eligible small

1997 form FTB 3805Q, Part II, column (h).

Use Part I of this form to figure the current year

business from the Standard Industrial Classification

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

NOL, if any, eligible for carryover.

Manual, 1987 edition. DO NOT enter the code from

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

Line 2 – If the corporation incurred a disaster loss

the PBA chart available in the 1998 Form 100 or

previous line.

Form 100S booklets. If the loss was from a

during 1998, enter the amount of the loss on this

Column (g) – Enter the result of subtracting column

line. Enter as a positive number.

pass-through entity, enter the entity’s federal

(f) from the balance in column (g) of the previous

employer identification number from Schedule K-1

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

line.

(100S).

does not have a current year general NOL. Go to

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

Part II for computation of general NOL carryovers,

Following is a list of events that have been declared

from the amount in column (e) and enter the result.

the current year disaster loss and carryover from

disasters:

disaster losses.

Current Year NOLs

Year

Code

Event

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

Line 3, Column (d) – Enter your 1998 disaster loss

1998

El Nin ˜ o ’98.

your 1998 NOL carryover to 1999. Complete

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

1997

Disaster floods ’96/97.

disaster loss in the prior year:

columns (b), (c), (d) and (h) only, for each type of

1996

•

loss that you incurred.

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

1996

Firestorms ’96.*

If you have a business that qualifies as a new

1998.

1995

Storms, flooding and other related casualties.

•

business or a small business and your NOL is

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

1994

San Luis Obispo fire and other related casualties.

greater than the amount of net loss from such a

If you elected to deduct your 1998 disaster loss on

1994 13

Los Angeles, Orange, and Ventura County

business, use the general NOL first. If you operate

earthquake and other related casualties.

your 1997 return, and you have an excess amount

one or more new businesses and one or more

to be carried over to 1998, enter the carryover

1993

Storms, floods and other related casualties.

eligible small businesses, determine the amount of

amount from your 1997 form FTB 3805Q, Part II,

1992

Wildfires and other related casualties in

the loss attributable to the new business(es) and to

Calaveras and Shasta Counties.

line 3, in Part II, line 2, column (e). Use the Prior

the small business(es). The NOL deduction will be

Year NOL instructions for column (a) through column

1992

San Bernardino County earthquake and other

taken in the following manner. The NOL is first

related casualties.

(h) except:

treated as a new business NOL to the extent of the

•

1992

Riots, arson and related casualties in California

In column (a), enter 1998;

loss from the new business. Any remaining NOL is

•

during April and May.

In column (b), enter 18; and

then treated as an eligible small business NOL to

•

1992

Humboldt County earthquake and related casualties.

In column (d), enter the total disaster loss

the extent of the loss from the eligible small

1992

Storms, floods and other related casualties.

incurred in 1998.

business. Any further remaining NOL is treated as

1991

Oakland/Berkeley fire and other related casualties.

Line 4 – Enter your 1998 NOL from Part I, line 3. If

an NOL under the general rules.

1990

Santa Barbara fires and other related casualties.

you have different types of NOLs in the current year,

Part II

1989

Bay Area earthquake and other related casualties.

list each type of loss separately. Enter the initial loss

1987

Forest fires, October earthquake and other

in column (d) and the loss to be carried over to

Use Part II to limit current year disaster loss and

related casualties.

subsequent years in column (h) for each NOL.

loss carryover deductions to current year income

1986

Storms, floods, and other related casualties.

and to record all of the corporation’s loss carryover

Part III

1985

Forest fires and related casualties occuring in

information.

California.

Line 1 – If a current year disaster loss amount is

*The carryover period is limited to 5 years at 50%, no special

If the corporation has losses from more than one

entered in Part II, line 2, column (f), but is also

legislation was enacted.

source and/or more than one category, the

included in the amount in Part 1, line 1, do not

corporation must compute the allowable NOL

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

include that amount on this line.

carryover for each loss separately.

in General Information F.

When to use an NOL carryover – Use your NOLs

in the order the losses were incurred. There is no

requirement to deduct NOL carryovers before

disaster loss carryovers.

Prior Year NOLs

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

Page 2

FTB 3805Q 1998

Instructions For Form Ftb 3805q - Net Operating Loss (Nol) Computation And Nol And Disaster Loss Limitations - Corporations - 1998 Page 2

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