1. Administering Tax Reporting
  2. Working with Net Operating Losses (NOL)/Credits
  3. Learning NOL Automation Calculation Rules
  4. Utilizing Tax Loss/Credit
  5. Defining Utilization Rule

Defining Utilization Rule

  1. Define a utilization rule for the carry forward account where losses are available for utilization (multiple carry forward accounts can also be used for utilization)
  2. Note that utilization priority is mandatory to be specified, priority start with number 1 and goes incrementally in case of multiple accounts.

    Define Utilization Rule

  3. Save the rule.

    Note:

    There are two criteria’s for the Utilization process:
    • Entity must have a positive income:

      Utilization - Process Criteria 1

    • Entity must have losses available to utilize:

      Utilization - Process Criteria 2

      If the entity has positive income, and it has losses available to utilize the positive income, then the utilization automated process will be started. Note that same utilization process applies to Regional loss/credit accounts too.

      In the screenshot below, maximum 18000$ can be utilized.

      Maximum Utilization

      After running successful consolidation, below screenshot shows the amount utilized:

      Amount Utilized

      Below screenshot shows how the losses are utilized based on their expiration year:

      Losses Based on Expiration Year