2009 IRS 5 Year NOL Carry Back - How Cost Segregation Can Add Benefit
February 23rd, 2010 |
President Obama signed H.R. 3548, The Worker, Homeownership, and Business Assistance Act of 2009 into law. One of the provisions of the act is the extension of a Five Year NOL Carry Back to most businesses for 2008 or 2009. Previously, under the American Recovery and Reinvestment Act of 2009, eligible small businesses (with average gross receipts of $15 Million or less) were allowed to carry back Net Operating Losses (NOLs) from 2008 for three, four or five years rather than the standard two years.
The new act expands the election to allow most businesses (large and small) to carry back NOLs incurred in 2008 or 2009 (typically not both) to the previous five years. Under the new act, an NOL carried back to the fifth year before the loss is limited to 50% of the available taxable income for that year. Any remaining NOL can then be applied in remaining four carry back years.
BENEFIT: A business can carry back an NOL to a previously profitable year and obtain a refund for taxes paid in that year.
CONSIDERATION: Eligible businesses that own commercial or residential rental property should consider having a cost segregation study performed for the 2009 tax year. A properly performed Engineering Based Cost Segregation Study can increase the amount of the NOLs to be carried back and thus will provide a larger tax refund.
It is not to late to extend your taxes and have a properly performed cost segregation study completed before the September 15th deadline.
M&E Cost Segregation specializes in working with CPA’s and property owners, to provide the engineering resources and documentation necessary to take advantage of this IRS approved engineering based tax strategy.
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