Nebraska Administrative Code
Topic - REVENUE, DEPARTMENT OF
Title 316 - NEBRASKA DEPARTMENT OF REVENUE
Chapter 22 - INDIVIDUAL INCOME TAX REGULATIONS
Section 316-22-005 - LOSS CARRYOVER AND CARRYBACK

Universal Citation: 316 NE Admin Rules and Regs ch 22 ยง 005

Current through March 20, 2024

005.01 Nebraska Net Operating Losses

Losses realized on or after January 1, 1968, by an individual may be included for purposes of computing the Nebraska income tax. The appropriate federal rules will be used, except that no loss shall be carried back to income earned before January 1, 1968.

005.02 Federal Net Operating Losses and Capital Losses

Individual taxpayers who have deducted a federal net operating loss or a federal capital loss in computing their federal adjusted gross income shall add such deduction to their federal adjusted gross income in order to determine Nebraska taxable income.

005.03 Net Operating Loss Carryback and Carryover

An individual, who has incurred a Nebraska net operating loss, shall be allowed to carry back such loss for the period allowed by the Internal Revenue Code as an adjustment decreasing federal adjusted gross income in the prior year. If the taxable income for this period is not sufficient to absorb the entire loss, the individual is then entitled to a carryover of the remaining amount of the loss to the taxable years allowed by the Internal Revenue Code following the loss year. The loss will be absorbed in the earliest year of the above period that has taxable income. The provisions of the Internal Revenue Code shall be used in computing the amount of the loss available for carryover.

005.03A If an individual elects to forego the entire carryback period for a federal net operating loss and only deduct the losses during the carryover period, the election for federal purposes will be followed for Nebraska purposes with regard to a Nebraska net operating loss.

005.03B When an individual has incurred a Nebraska net operating loss, but has no federal net operating loss, the individual may elect to relinquish the carryback period for Nebraska purposes when the Internal Revenue Code provides for a similar election for federal purposes. The election must be made by attaching a statement to the Nebraska return and filing the return by the due date, including extensions, for the tax year of the net operating loss. Failure to timely file the election with the original return for the loss year will require the use of the carryback period. The election cannot be changed once it has been made.

005.04 Computation of Nebraska Net Operating Loss

In order to be deducted from income subject to Nebraska income tax under Reg-22-002, the net operating loss must be a Nebraska net operating loss which has been reported on a return filed for the loss year.

005.04A For a resident during the loss year, the Nebraska net operating loss is the reported federal net operating loss as adjusted within this paragraph.
005.04A(1) The loss will be increased by the amount of allowable adjustments to federal adjusted gross income, such as deductions for interest or dividend income from U.S. government bonds or other U.S. obligations and decreased by the amount of adjustments to federal adjusted gross income, such as additions for interest or dividends from obligations issued by states other than Nebraska.

005.04A(2) A loss may be created when the allowable adjustments exceed the federal adjusted gross income.

005.04B For tax years beginning before January 1, 1987, for a nonresident during the loss year, the Nebraska net operating loss is the loss that was derived from activities which would have generated Nebraska source income under Reg-22-003.

005.04C For tax years beginning before January 1, 1987, for a partial-year resident individual during the loss year, the Nebraska net operating loss is the loss that was derived from activities which would have generated Nebraska source income under Reg-22-004.

005.04D For tax years beginning on or after January 1, 1987, the net operating loss of a nonresident is the lesser of his or her federal net operating loss as adjusted pursuant to paragraph 005.04A(1) and his loss derived from Nebraska sources.

005.04E For tax years beginning on or after January 1, 1987, the net operating loss of a partial-year resident is the lesser of his or her federal net operating loss as adjusted pursuant to paragraph 005.04A(1) and the loss derived from Nebraska sources.

005.05 Nebraska Capital Losses

Individual taxpayers who have incurred, after December 31, 1967, a capital loss, may carry over the loss until the loss has been exhausted. Nonresident individuals and partial-year resident individuals who move out of the state will be allowed the same carryover period except that only net capital losses attributable to Nebraska sources may be carried forward and used to offset Nebraska source income. The appropriate federal capital loss carryover rules apply in reducing long term capital gains, short term capital gains, and ordinary income in the carryover year.

005.06 Any unused loss carryover or other deductions, which, under federal rules, may be passed on to beneficiaries because of the termination of an estate or trust, shall be recognized for Nebraska income tax purposes only if they were realized in the estate or trust on or after January 1, 1968. The termination date of the estate or trust shall not determine whether such losses or deductions were realized on or after January 1, 1968.

Disclaimer: These regulations may not be the most recent version. Nebraska may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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