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CARES Act Provides Potential Cash Flow Opportunities for Businesses with NOLs

April 08, 2020

By: Amanda Wilson 

The Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, signed into law by President Trump last month, makes several important changes to the Net Operating Loss (NOL) provisions.  

Specifically, the CARES Act allows for business to use NOLs from tax years starting prior to January 1, 2021, to fully offset their income, which is a change from the rule imposed by the 2017 Tax Cuts and Jobs Act limiting the offset to 80% of income.  

The CARES Act also provides that taxpayers can, for tax years 2018, 2019, and 2020, carry back their NOLS to their five prior taxable years, which could result in a refund. 

Businesses with NOLs should consult their tax advisors to see if they can benefit from these tax changes. If so, an amended return could result in a refund and some much needed additional cash flow.  

Be sure to visit our Coronavirus (COVID-19) Response Team page to keep up to date on the latest news.


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Amanda

A member of the firm’s tax practice, Amanda Wilson concentrates on federal tax planning and structuring. She represents clients in a wide variety of complex federal tax matters with a particular emphasis on pass-through entities such as partnerships, S corporations and real estate investment trusts. Specifically, Amanda focuses on advising clients on the formation, operation, acquisition and restructuring of such pass-through entities. In addition, she regularly advises clients on the structuring and operation of private equity funds, real estate funds and timber funds. Amanda is the author of the Bloomberg Tax Management Portfolio 718-3rd Edition, Partnerships- Disposition of Partnership Interests or Partnership Business; Partnership Termination.

Amanda regularly works in structuring deals to benefit from tax advantaged structures, including like-kind exchanges, new market tax credits, low income housing tax credits, and qualified opportunity zones. Amanda also has extensive experience in corporate planning and international tax matters, as well as federal tax controversy. Her practice before the Internal Revenue Service (IRS) includes providing advice on audits and appeals, drafting protests and ruling requests, and negotiating settlements.

Prior to joining the firm, Amanda worked for Sutherland Asbill & Brennan LLP (now Eversheds Sutherland), an Am Law 100 firm in the Atlanta office, where she was part of Sutherland’s Tax Practice Group. Amanda has also served as an adjunct professor at Emory University School of Law where she taught Partnership Taxation.

Amanda regularly contributes to the firm’s Taxing Times blog and is a regular panelist on tax webinars hosted by Strafford Publications.

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