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Enrolled Agent Exam [Part 2] 63, Net Operating Loss (NOL) — Carryforward Rules
This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.
In this episode you will learn:
- Post-2017 Net Operating Losses (NOLs) have an indefinite carryforward period but generally cannot be carried back.
- The deduction for post-2017 NOLs is limited to 80% of the taxable income in the carryover year, calculated before the NOL deduction itself.
- Pre-2018 NOLs follow older rules: a 2-year carryback and a 20-year carryforward, with the ability to offset 100% of taxable income.
- Specific exceptions exist, such as a 2-year carryback for certain farming losses, which are common exam trick questions.
- Use the mnemonic "After '17, NOLs go on for infinity, but they're only eighty percent mighty" to remember the indefinite carryforward and 80% limitation for post-2017 NOLs.
For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep
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By Ran Chen, EA, CFP®This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.
In this episode you will learn:
- Post-2017 Net Operating Losses (NOLs) have an indefinite carryforward period but generally cannot be carried back.
- The deduction for post-2017 NOLs is limited to 80% of the taxable income in the carryover year, calculated before the NOL deduction itself.
- Pre-2018 NOLs follow older rules: a 2-year carryback and a 20-year carryforward, with the ability to offset 100% of taxable income.
- Specific exceptions exist, such as a 2-year carryback for certain farming losses, which are common exam trick questions.
- Use the mnemonic "After '17, NOLs go on for infinity, but they're only eighty percent mighty" to remember the indefinite carryforward and 80% limitation for post-2017 NOLs.
For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep