How are net operating losses treated?
A Corporation or Partnership may carry forward the loss and can offset it against its future taxable income for up to five years.

For Unincorporated businesses, if you operated more that one Middletown business, a net operating loss can be used to offset profits from any other type of Middletown business you operate. The remainder of the loss that could not be offset to other business profits can be carried forward to be used as a future offset for up to five years. Net operating losses cannot be used to offset wages.

Show All Answers

1. Does a business have to file a return?
2. How should S-Corporations and Partnerships report their profits?
3. What income should an Incorporated business report?
4. What income should an Unincorporated (sole proprietor) business report?
5. How is taxable income determined for businesses?
6. How are net operating losses treated?
7. Can I combine reporting for multiple business' on a single tax return?