Code of Maine Rules
18 - DEPARTMENT OF ADMINISTRATIVE AND FINANCIAL SERVICES
125 - BUREAU OF REVENUE SERVICES
Chapter 810 - MAINE UNITARY BUSINESS TAXABLE INCOME, COMBINED REPORTS, AND TAX RETURNS
Section 125-810-.08 - ALLOCATION AND USE OF COMBINED NET OPERATING LOSSES
Current through 2024-38, September 18, 2024
The allocation and/or use of losses is necessary for purposes of determining the availability of net operating loss deductions to the unitary business in the event that a member leaves the unitary business and/or a new member enters a unitary business. Net operating losses and the use of net operating losses must be allocated to each member of the unitary business that individually sustains a loss or utilizes a net operating loss. The allocation and use of the net operating losses must be done in a manner consistent with federal law and regulations.
In a year in which the unitary business as a whole experiences a loss as determined in section .03(G) above, the loss amount, and the use of the loss amount, allocated to individual members of the unitary business is determined as follows:
A. Allocation of losses. The loss allocated to those members that sustained a loss under the calculations performed under section .03(G) above is determined on the basis of each loss member's proportional contribution to the loss. The proportional factor is applied against the total net loss of the unitary business as a whole to determine the amount allocated to each member that experienced the loss.
B. Allocation of use of losses. Net operating losses that make up the net operating loss deduction must be applied in chronological order. Eligible losses arising in taxable years ending on the same day and that are deductible without limitation in the taxable year are applied on a pro rata basis.
