Neb. Admin. Code § 316-24-060 — Net Operating Losses and Capital Losses

060.01 Any deduction for a federal net operating loss or capital loss shall be an adjustment increasing federal taxable income in order to compute Nebraska taxable income. 060.01A Where Nebraska taxable income is computed by apportionment, such adjustment shall be made prior to apportionment. 060.02 There shall be allowed as a deduction in computing Nebraska taxable income a carryforward of a Nebraska net operating loss computed on the basis of this regulation. 060.02A A Nebraska net operating loss for a corporate taxpayer that is not subject to apportionment shall be the amount of net operating loss after the adjustments have been made to the federal taxable income of the corporate taxpayer. 060.02B A corporate taxpayer who is required to apportion its income to Nebraska shall compute its Nebraska net operating loss in the following manner: 060.02B(1) Nebraska adjustments shall be made to the federal taxable income or net operating loss of the unitary group prior to apportionment. 060.02B(2) The federal net operating loss as adjusted is apportioned to Nebraska based on the apportionment factor of the corporate taxpayer for the year of the loss. 060.03 For tax years beginning on or after January 1, 1987, the Nebraska net operating loss may be allowed as a deduction in computing Nebraska taxable income for each of the five taxable years following the year of the loss. For Nebraska net operating losses incurred prior to tax years beginning prior to January 1, 1987, the periods in which the Nebraska net operating loss may be deducted shall be in accordance with the federal rules for such periods. 060.04 The carry forward of Nebraska net operating losses after reorganizations or mergers is limited to the same extent as the carryover of a net operating loss is limited under the provisions of sections 381 through 384 of the Internal Revenue Code and regulations thereunder or any other section of the Internal Revenue Code or regulations thereunder. Where the taxpayer files as a part of a consolidated income tax return for federal income tax purposes, but a separate return for Nebraska income tax purposes, the limitation on an Nebraska net operating loss carryforward must be determined as though a separate income tax return was filed for federal income tax purposes. 060.05 In addition to the limitations contained in paragraph 060.04 an additional limitation is imposed where a corporation which has a Nebraska operating loss carryforward becomes a member of a unitary group in a year in which such carryforward is still available. The net operating loss carryforward deduction shall not exceed the apportionable income of the unitary group times a fraction, the numerator of which is the Nebraska gross receipts of such corporation and the denominator is the gross receipts of the unitary group. 060.06 There shall be allowed a deduction in computing Nebraska taxable income a carryforward of a Nebraska capital loss computed on the basis of this regulation. 060.06A A Nebraska capital loss for a corporate taxpayer that is not subject to apportionment shall be the amount of capital loss after the adjustments have been made to the federal capital gain or loss of the corporate taxpayer. 060.06B A corporate taxpayer who is required to apportion its income to Nebraska shall compute its Nebraska capital loss in the following manner. 060.06B(1) Nebraska adjustments should be made to the federal capital gain or loss of the unitary group prior to apportionment. 060.06B(2) The federal capital loss as adjusted is apportioned to Nebraska based on the apportionment factor of the corporate taxpayer for the year of the capital loss. 060.07 For any Nebraska capital loss incurred in tax years beginning on or after January 1, 1987, the Nebraska capital loss may be allowed against any Nebraska capital gain for each of the five taxable years following the year of the capital loss. For Nebraska capital losses incurred in tax years beginning prior to January 1, 1987, the periods in which the Nebraska capital loss may be deducted shall be in accordance with federal rules for such loss year. (Section 77-2734.07, R.R.S. 1996. November 11, 1998.)