New York Adds Tax Guidance on Capital Losses, Combined Reports

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By John Herzfeld

Capital loss carry-backs and filing requirements for an extension as part of a combined reporting group are the subject of new guidance tips issued as part of the New York Department of Taxation and Finance’s massive business tax overhaul project.

The advice, posted Jan. 26 to the department’s online frequently asked questions related to the project, addressed issues raised by taxpayers and practitioners during an informal rulemaking leading up to the proposal of new regulations.

The FAQ feature on the department’s website is one of several tools offered by the state as it pursues an unprecedented effort to carry out broad changes made to the state corporate franchise tax by 2014 and 2015 legislation.

Billed by New York officials as “the most significant reform” of the state’s corporate tax system since the 1940s, the changes are aimed at modernizing and streamlining the tax code. They generally took effect Jan. 1, 2015, though state lawmakers have continued to refine them.

Answers May Change

The department cautioned that subsequent changes in the law or its interpretation may affect the accuracy of the FAQ postings.

In one FAQ, the department advised that net capital losses in general can be carried back three years, but those earned in 2015 or later can’t be carried back to a tax year that begins before 2015.

In the other, the department said that corporations filing a combined group return must file one extension form for all of its members. However, separate extension forms must be filed by taxpayer members that are added to an existing group or by taxpayer members forming a new combined group.

Non-taxpayer members of a combined group never have to file a separate extension form, regardless of whether they are included in the combined group’s extension request, the department said.

To contact the reporter on this story: John Herzfeld in New York at

To contact the editor responsible for this story: Ryan C. Tuck at

For More Information

The Corporate Tax Reform FAQs are at

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