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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department of Taxation
Chapter 110. Individual Income Tax
11/21/2024

23VAC10-110-82. Net operating losses; Virginia modifications in the loss year.

A. Generally. Each item that is a component of the federal net operating loss must be examined to see if a Virginia modification is required to be made to that item. To the extent that a Virginia modification is required, the net amount of such modifications shall become associated with the federal net operating loss. (See 23VAC10-110-83.)

In addition to the modifications enumerated under 23VAC10-110-80, a modification shall be made to any other item that is a component of the federal net operating loss that Virginia law treats dissimilarly.

B. Zero bracket amount. There is no provision in the Code of Virginia for the allowance of a deduction for an amount equal to the federal zero bracket amount. In cases where taxpayers for federal purposes do not itemize deductions, all or part of the federal zero bracket amount may be included in the amount of federal net operating loss. To the extent that any amount of the federal zero bracket amount is included in the federal net operating loss, a positive Virginia modification is required. (See example 3.)

C. Other modifications required.

1. A positive modification is required for the items enumerated in § 58.1-322 B of the Code of Virginia-Additions to federal adjusted gross income. Also see 23VAC10-110-141.

2. A negative modification is required for the items enumerated in § 58.1-322 C of the Code of Virginia-Subtractions from federal adjusted gross income. Also see 23VAC10-110-142.

3. A positive modification is required for the state tax deduction specified in § 58.1-322 D 1 a of the Code of Virginia, and a negative modification is required for the additional charitable mileage deduction allowed by this same section. Also see 23VAC10-110-143 1 b.

4. A negative modification is required for the additional deduction of $400 specified in § 58.1-322 D 2 of the Code of Virginia. Also see 23VAC10-110-143 3.

Statutory Authority

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

Historical Notes

Derived from VR630-2-311.1 § 3, eff. taxable years beginning on and after January 1, 1985.

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