Rev. Proc. 2021-14: Guidance on NOL elections and revocations, farming losses

Special rules for taxpayers with a NOL for any tax year beginning in 2018, 2019 or 2020 when all or a portion of the NOL consists of farming losses

Special rules for taxpayers with a NOL for any tax year beginning in 2018, 2019 or 2020

The IRS today released an advance version of Rev. Proc. 2021-14 as guidance regarding elections and revocations under special rules for taxpayers with a net operating loss (NOL) for any tax year beginning in 2018, 2019 or 2020 when all or a portion of the NOL consists of farming losses.

A provision of the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) (Pub. L. No. 116-136) provides special rules for taxpayers with NOLs for any tax year beginning in 2018, 2019 or 2020 when all or a portion consists of a “farming loss” as defined under section 172(b)(1)(B)(ii) .

Rev. Proc. 2021-14 [PDF 114 KB] provides:

  • When and how to make an election with regard to all NOLs of the taxpayer—regardless of whether the NOL is a farming loss NOL
  • A taxpayer is treated as having made a deemed election pursuant to the CARES Act if the taxpayer, before December 27, 2020, filed one or more original or amended federal income tax returns, or applications for tentative refund, that disregard the CARES Act amendments with regard to a farming loss NOL
  • When and how to revoke an election made under section 172(b)(1)(B)(iv) or section 172(b)(3) to waive the two-year carryback period for the farming loss portion of a farming loss NOL incurred in a tax year beginning in 2018 or 2019
     

For more information, contact KPMG’s National Director of Cooperative Tax Services:

David Antoni | +1 (267) 256-1627 | dantoni@kpmg.com
 

Associate National Director of KPMG’s Cooperative Tax Services:

Brett Huston | +1 (916) 554-1654 | bhuston@kpmg.com

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.