Connecticut Administrative Code
Title 12 - Taxation
223a - Corporation Business Tax
Section 12-223a-2 - Combined operating loss
Current through September 9, 2024
(a) A "combined operating loss" exists in an income year (the combined loss year) in which the companies included in a combined return have a combined entire net loss (i.e., the sum of the entire net loss or, if applicable, the entire net income of each company included in such combined return is less than zero).
(b) The portion of a combined operating loss which may be deducted as a combined operating loss carryover in any of the five income years next succeeding the combined loss year shall be limited to the lesser of the following:
(c) The combined operating loss of any combined loss year shall be deducted in any of the five succeeding years, to the extent available therefor, before the combined operating loss of any succeeding combined loss year is deducted.
(d) The combined operating loss carryover provisions are applicable only to companies which were included in the same combined return made for, and subject to the tax imposed under chapter 208 in, the combined loss year.
(e) The operating loss of a company included in a combined return attributable to a loss year preceding the inclusion of such company in such combined return shall be deductible as an operating loss carryover in each of the five income years next succeeding such loss year. To the extent that any portion of such operating loss is so deducted, the entire net income of such company shall likewise be reduced for purposes of determining-
Example:
Company A files a separate return in Year One (a loss year) and Year Two. Company A is included in a combined return with Companies B and C in Year Three, Year Four (a combined loss year), Year Five and Year Six.
|
Company A Entire Net Income or (Loss) |
Company B |
Company C |
Combined Entire Net Income or (Loss) A, B & C |
|||
|
Before Carryover Deduction |
After Carryover Deduction |
Before Combined Carryover |
After Combined Carryover |
|||
|
Year 1: |
(100) |
- |
15 |
25 |
40 |
- |
|
Year 2: |
20 |
0 |
5 |
30 |
35 |
- |
|
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * |
||||||
|
Year 3: |
7 |
0 |
12 |
16 |
28 |
- |
|
Year 4: |
43 |
0 |
(53) |
17 |
(36) |
- |
|
Year 5: |
29 |
0 |
8 |
14 |
22 |
0 |
|
Year 6: |
9 |
8 |
31 |
(12) |
27 |
13 |
(f) Any company included in a combined return made for a combined loss year shall, in any of the five income years succeeding such combined loss year for which it is not included in such combined return, deduct a portion of such combined operating loss carryover not exhausted by the combined entire net income of any of such five succeeding years, provided-
Example:
Company A is included in a combined return with Companies B and C in Year One, Year Two (a combined loss year), Year Three and Year Four. Company A, B and C are not included in such combined return in Year Five, Year Six and Year Seven.
|
Company A |
Company B |
Company C |
Combined Entire |
||||
|
Entire Net Income or (Loss) |
Entire Net Income or (Loss) |
Net Income or (Loss) A, B & C |
|||||
|
Before Carryover Deduction |
After Carryover Deduction |
Before Carryover Deduction |
After Carryover Deduction |
Before Carryover Deduction |
After Carryover Deduction |
||
|
Year 1: |
12 |
- |
26 |
(10) |
- |
28 |
- |
|
Year 2: |
(40) |
- |
27 |
(20) |
- |
(33) |
- |
|
Year 3: |
2 |
- |
23 |
(13) |
- |
12 |
0 |
|
Year 4: |
3 |
- |
8 |
(11) |
- |
0 |
- |
|
* * * * |
* * * * * |
* * * * |
* * * |
* * * * |
* * * * |
* * * * * |
* * * * * |
|
Year 5: |
7 |
0 |
15 |
8 |
1 |
- |
- |
|
Year 6: |
4 |
0 |
21 |
9 |
- |
- |
- |
|
Year 7: |
5 |
2 |
18 |
0 |
- |
- |
- |
