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Is nolco an itemized deduction?

Is nolco an itemized deduction?

3 of the National Internal Revenue Code (NIRC), net operating loss carry-over (NOLCO) shall mean the excess of allowable deductions over business gross income in a taxable year. According to BIR Revenue Regulation No 14-2001, NOLCO is not part of the itemized deductions.

Who can claim nolco?

2.2 In general, NOLCO shall be allowed as a deduction from the gross income of the same taxpayer who sustained and accumulated the net operating losses regardless of the change in its ownership. This rule shall also apply in the case of a merger where the taxpayer is the surviving entity.

Is nolco an allowable deduction?

Ordinarily, NOLCO can be carried over as deduction from gross income for the next three (3) consecutive years only. The NOLCO shall be separately shown in the taxpayer’s income tax return while the unused NOLCO shall be presented in the notes to financial statements in detail.

What are the conditions for the deductibility of nolco?

To avail NOLCO deduction for taxpayers claiming itemized deductions, it must have been properly stated on the prior year financial statements, and income tax returns. Note that it could be claimed within three (3) taxable years from the year of loss on a first-in, first-out basis.

How do you present nolco in the return and unused nolco in the income statement?

The NOLCO shall be separately shown in the taxpayer’s income tax return while the unused NOLCO shall be presented in the notes to financial statements in detail. The NOLCO for the taxable years 2020 and 2021 shall be presented in the notes to financial statements separately from the NOLCO for other taxable years.

Where does NOLCO go on a tax return?

–The NOLCO shall be separately shown in the taxpayer’s income tax return (also shown in the Reconciliation Section of the Tax Return) while the Unused NOLCO shall be presented in the Notes to the Financial Statements showing, in detail, the taxable year in which the net operating loss was sustained or incurred, and any

Can a business claim NOLCO on an OSD?

We can see that NOLCO is a kind of deduction applicable to business income but not to compensation income. Furthermore, an individual who claims the 10% optional standard deduction (OSD) shall not simultaneously claim deduction of the NOLCO. Secondly, how do I present nolco in tax return?

Can a NOLCO be carried over to the next year?

Ordinarily, NOLCO can be carried over as deduction from gross income for the next three (3) consecutive years only. For corporate taxpayers who are on fiscal year accounting period, taxable year 2020 and 2021 shall include all those corporations with fiscal years ending on or before June 30, 2021, and June 30, 2022, respectively.

What makes a NOLCO a deferred tax asset?

NOLCO, being the excess of the allowable deductions over the gross income, is considered as a deferred tax asset (DTA) as it is a ‘carryforward’ of unused tax losses consistent with paragraph 5 (b) of PAS 12, Income Taxes. Also, can nolco be applied to MCIT?