(a)  A corporation required to allocate and apportion its net income or net loss under G.S. 105‑130.4 may carry forward only a portion of its net economic loss.  After the required adjustments for income not taxable in the next succeeding year have been made, the allocable portion of such determined net economic loss deduction is deducted from the total amount of income allocated to this state.  For example, a corporation allocating 50 percent of its net income or loss to North Carolina in a particular year in which it sustains a total net economic loss of one thousand dollars ($1,000.00) may carry forward only five hundred dollars ($500.00) to a subsequent year.

(b)  Where the allocating corporation earns nonapportionable income subject to direct allocation outside North Carolina in a year succeeding the loss‑year, the portion of the directly allocated income used to offset the loss brought forward is determined by applying to such income the allocation percentage applicable to the succeeding year.


History Note:        Authority G.S. 105‑130.8; 105‑262;

Eff. February 1, 1976;

Amended Eff. January 1, 2005.