Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Level 1
posted Jun 9, 2020 1:40:04 PM

I want to close my corporation (registered in California) and open another corporation in Texas. How do i transfer NOL from the California corporation to the new one using Torbotax business?

I own 80% stock in both corporations. 

0 1 391
1 Best answer
Level 13
Jun 9, 2020 5:35:03 PM

You can't just move NOL's from company to company.

This issue is one that is best handled with competent tax professional(s).  I say plural as you will need to involve legal counsel and a tax professional.

There are rules that prevent the shifting of NOLs, however, those apply only when there has been an owner or equity shift of more than 50 percent over a 3 year period.  Based on the limited facts, you are currently below that threshold as you indicate you own 80% of both companies.

However, you can only accomplish what you want through an acquisition or a merger; hence the need to involve legal counsel.

 

1 Replies
Level 13
Jun 9, 2020 5:35:03 PM

You can't just move NOL's from company to company.

This issue is one that is best handled with competent tax professional(s).  I say plural as you will need to involve legal counsel and a tax professional.

There are rules that prevent the shifting of NOLs, however, those apply only when there has been an owner or equity shift of more than 50 percent over a 3 year period.  Based on the limited facts, you are currently below that threshold as you indicate you own 80% of both companies.

However, you can only accomplish what you want through an acquisition or a merger; hence the need to involve legal counsel.