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NOL Carryover

Type of NOL and Description

Taxable Year

NOL

Carryover*

NOL

Carried Over

Period

Incurred

General NOL (GEN)

On or after

Available as a result of a loss incurred in years after 1986 allowed under R&TC Section 17276.20.

01/01/2008

100%

20 Years

(Does not include losses incurred from activities that qualify as a new business or an eligible small

2004-2007

100%

10 Years

business [described below], an EZ, LARZ, LAMBRA, TTA, disaster loss, or a loss due to Pierce’s

2002-2003

60%

10 Years

disease and its vectors).

2000-2001

55%

10 Years

1987-1999

None

Expired

Disaster Losses (DIS)

See

100%

First

Casualty losses sustained as the result of a disaster, not reimbursed by insurance or otherwise, and

“Designated

5 Years

designated by the President of the United States or the Governor of California to warrant assistance.

Disasters”

If the loss qualifies under IRC Section 165(i), the taxpayer may elect to deduct the loss from the

See

10 Years

on page 5

previous year’s income.

Description

Thereafter

If special legislation is enacted under the R&TC, 100% of the excess loss may be carried over for

up to five years. If any excess loss remains after the five year period, 50% of that remaining loss

may be carried over for up to ten additional taxable years for losses incurred in any taxable year

beginning before January 1, 2000; 55% for losses incurred in any taxable year beginning on or after

January 1, 2000, and before January 1, 2002; 60% for losses incurred in any taxable year beginning

on or after January 1, 2002, and before January 1, 2004; or 100% for losses incurred in any taxable

year beginning on or after January 1, 2004.

New Business NOL (NB) Refer to FTB Legal Ruling 96-5 issued August 19, 1996.

On or after

100%

20 Years

New Business means any trade or business that first commenced in California on or after

01/01/2008

January 1, 1994. 100% of an NOL may be carried over, but only to the extent of the net loss from the

On or after

100%

10 Years

new business. If a taxpayer’s NOL exceeds the net loss from the new business, the excess may be

01/01/2000

For the

carried over as a general NOL.

and before

first three

If a taxpayer acquires assets of an existing trade or business which is doing business in California,

01/01/2008

years of

the trade or business thereafter conducted by the taxpayer or related persons (IRC Sections 267 or

business

318) is not a new business if the fair market value (FMV) of the acquired assets exceeds 20% of the

On or after

FMV of the total assets of the trade or business.

01/01/1994

If a taxpayer or related person has been engaged in a trade or business in California within the

and before

preceding 36 months and thereafter commences an additional trade or business in California, the

01/01/2000

additional trade or business qualifies as a new business only if the activity is classified under a

different division of the Standard Industrial Classification (SIC) Manual, 1987 Edition. Business

Year of

activities conducted by the taxpayer or related persons wholly outside California are disregarded in

Business

determining whether the trade or business conducted within California is a new business.

Year 1

100%

8 Years

The term “new business’’ includes any taxpayer engaged in biopharmaceutical activities or other

biotechnology activities described in Codes 2833 to 2836 of the SIC Manual, 1987 Edition. It also

Year 2

100%

7 Years

includes any taxpayer that has not received regulatory approval for any product from the United

States Food and Drug Administration.

Year 3

100%

6 Years

See R&TC Section 17276.20(f)(7)(A) for more information.

Eligible Small Business NOL (ESB) Refer to FTB Legal Ruling 96-5 issued August 19, 1996.

On or after

100%

20 Years

An ESB NOL is an NOL incurred in operating a trade or business activity that has gross receipts, less

01/01/2008

returns and allowances, of less than $1 million during the taxable year. 100% of an ESB NOL may be

On or after

100%

10 Years

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

01/01/2000

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

and before

Taxpayers should use the same SIC Code tests described in the “New Business NOL,’’ above, to group

01/01/2008

trade or business activities for the eligible small business NOL.

On or after

None

Expired

01/01/1994

and before

01/01/2000

Note: The carryover period for any NOL or NOL carryover, for which a deduction is disallowed because of the 2008-2011 suspension, is extended. For

more information, see General Information.

NOL Carryback

Type of NOL and Description

Taxable Year NOL Incurred

NOL Carried Back shall not exceed

Carryback Period

GEN, NB, and ESB NOL

On or after 01/01/2013 and

50%

2 Years

before 01/01/2014

NOLs incurred in taxable years

beginning on or after January 1, 2013,

On or after 01/01/2014 and

75%

2 Years

shall be carried back to each of the

before 01/01/2015

preceding two taxable years. Does not

include loss incurred from a disaster

On or after 01/01/2015

100%

2 Years

loss.

Page 2 FTB 3805V Instructions 2013

Instructions For Form Ftb 3805v - Net Operating Loss (Nol) Computation And Nol And Disaster Loss Limitations - Individuals, Estates, And Trusts - 2013 Page 2

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