KPMG report: Post-TCJA interplay between NOLs and charitable deductions

Complexities taxpayers encounter when they have both charitable contributions and NOL carryovers available to deduct

KPMG report: Post-TCJA interplay

Corporations face complexities—and potential benefits—if they have charitable contributions and net operating loss (NOL) carryovers available for deduction on their 2021 returns.

The interplay between charitable contribution deductions and NOL loss deductions has long bedeviled tax practitioners. The 2017 legislation known as the “Tax Cuts and Jobs Act” (TCJA) significantly increased the complexity of this relationship—an increased complexity that many taxpayers are grappling with for the first time as they prepare their returns for the 2021 tax year.

Read a 2022 report* [PDF 200 KB] prepared by KPMG LLP that, after providing a brief review of the relevant rules governing charitable contributions and NOL deductions, attempts to navigate the complexities taxpayers encounter when they have both charitable contributions and NOL carryovers available to deduct.

This report focuses on charitable contributions and NOL deductions available to corporations, rather than individuals, because the underlying principles are simpler to explain as applied to corporate taxpayers.

*Originally published in Tax Notes Federal (May 30, 2022) and reprinted with permission of the publisher.



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