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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department of Taxation
Chapter 110. Individual Income Tax
11/23/2024

23VAC10-110-80. Net operating losses; definitions.

The following words and terms, when used in this regulation, shall have the following meanings, unless the context clearly indicates otherwise:

"Carryback year" means any year preceding the loss year in which a deduction for a federal net operating loss is claimed pursuant to IRC § 172(b) for federal income tax purposes.

"Carryforward year" means any year subsequent to the loss year in which a deduction for a federal net operating loss is claimed pursuant to IRC § 172(b) for federal income tax purposes.

"Federal net operating loss" means an amount equal to the amount defined by IRC § 172(c).

"Loss year" means the taxable year to which the net operating loss is attributable.

"Net operating loss absorbed" means the amount of federal net operating loss as defined by IRC § 172(c) that is either used to offset modified federal taxable income in a carryback year or included in the computation of federal adjusted gross income in a carryforward year. In a carryback year, it is the amount necessary to reduce modified federal taxable income to zero, but not below zero. (See IRC § 172(b)(2).)

"Recomputed federal adjusted gross income" means the federal adjusted gross income as last determined for the carryback year, less the amount of net operating loss absorbed as defined above.

"Virginia modification" means the modifications specified in §§ 58.1-322 B and 58.1-322 C of the Code of Virginia that relate to federal adjusted gross income, the modifications to federal itemized deductions specified in § 58.1-322 D 1.a, the additional deduction of $400 specified in § 58.1-322 D 2, the beneficiary modifications specified in § 58.1-322 E, and the transitional modifications specified in § 58.1-322 F of the Code of Virginia.

Statutory Authority

§§ 58.1-203 and 58.1-311 of the Code of Virginia.

Historical Notes

Derived from VR630-2-311.1 § 1, eff. taxable years beginning on and after January 1, 1985.

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