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NOL Carryover

Type of NOL and Description

Taxable Year

NOL

Carryover

NOL Incurred

Carried Over

Period

General NOL (GEN)

On or after

Available as a result of a loss incurred in taxable years after 1986 and allowed under R&TC Section 24416.20.

01/01/2008

100%

20 Years

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

2004-2007

100%

10 Years

LARZ, LAMBRA, TTA, disaster loss, or Pierce’s disease.

2002-2003

60%

10 Years

2000-2001

55%

10 Years

1987-1999

None

Expired

Disaster Losses (DIS)

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

See

100%

First

be in a state of disaster. If the disaster is declared by the Governor of California only, subsequent state legislation is

“List of

5 Years

required for the disaster provision to be activated.

events that

have been

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

declared as

income. If the corporation made this election, see Part II, Current Year NOLs, line 3 and federal Form 4684 instructions

disasters” on

See

10 Years

for when the election must be filed. If special legislation is enacted and the specified disaster loss exceeds income in the

page 3.

instructions

Thereafter

year it is claimed, 100% of the excess may be carried over for up to five taxable years. If any excess loss remains after

the five-year period, 50% of that remaining loss may be carried over for up to 10 additional taxable years for losses

occurred 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)

On or after

100%

20 Years

01/01/2008

Get FTB Legal Ruling 96-5 for more information.

NB means any trade or business activity that is first commenced in California on or after January 1, 1994. 100% of an

NB NOL may be carried over, but only to the extent of the net loss from the new business. The term ‘’new business’’

On or after

100%

10 Years

also includes any taxpayer engaged in biopharmaceutical activities or other biotechnology activities described in Codes

01/01/2000

For the

2833 to 2836 of the SIC Manual. Also, it includes any taxpayer that has not received regulatory approval for any product

and before

first three

from the United States Food and Drug Administration. See R&TC 24416.20(g)(7)(A) for more information.

01/01/2008

years of

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

business

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

conducted by the taxpayer or related person is not a new business if the fair market value (FMV) of the acquired assets

On or after

exceeds 20% of the FMV of the total assets of the trade or business conducted by the taxpayer or any related person. To

01/01/1994

determine whether the acquired assets exceed 20% of the total assets, include only the assets that continue to be used

and before

in the same trade or business activity as were used immediately prior to the acquisition. For this purpose, the same

01/01/2000

trade or business activity means the same division classification listed in the SIC Manual.

Year of

If a taxpayer or related person has been engaged in a trade or business in California within the preceding 36 months

business

and then starts an additional trade or business in California, the additional trade or business qualifies as a new business

only if the activity is classified under a different division classification of the SIC Manual.

Year 1

100%

8 Years

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

Year 2

100%

7 Years

determining whether the trade or business conducted within California is a new business. Related persons are defined

in IRC Sections 267 or 318.

Year 3

100%

6 Years

Eligible Small Business NOL (ESB)

On or after

100%

20 Years

01/01/2008

Get FTB Legal Ruling 96-5 for more information.

An ESB NOL is an NOL incurred in a trade or business activity that has gross receipts, less returns and allowances, of

On or after

100%

10 Years

less than $1 million during the taxable year.

01/01/2000

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

and before

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

01/01/2008

The corporation should use the same SIC Code division classifications described in the New Business NOL section to

On or after

None

Expired

determine what constitutes a trade or business activity.

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, are extended. For more

information, see Important Information section.

NOL Carryback

Type of NOL and Description

Taxable Year

NOL Carried

Carryback

NOL Incurred

Back shall not

Period

exceed

GEN, NB, and ESB NOL

On or after

50%

2 Years

01/01/2013

NOLs incurred in taxable years beginning on or after January 1, 2013, shall be carried back to each of the

and before

preceding two taxable years. Does not include loss incurred from a disaster loss.

01/01/2014

On or after

75%

2 Years

01/01/2014

and before

01/01/2015

On or after

100%

2 Years

01/01/2015

Page 4 FTB 3805Q Instructions 2013

Instructions For Form Ftb 3805q - Net Operating Loss (Nol) Computation And Nol And Disaster Loss Limitations - Corporations - 2013 Page 4

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