State Codes and Statutes
Statutes > Utah > Title-59 > Chapter-07 > 59-7-11059-7-110. Utah net losses -- Carryforwards and carrybacks -- Deduction.
(1) The amount of Utah net loss that shall be carried back or forward to offset income ofanother taxable year is determined as provided in this section.
(2) (a) Subject to the other provisions of this section, a Utah net loss from a taxable yearbeginning before January 1, 1994, shall be carried back three taxable years preceding the taxableyear of the loss and any remaining loss shall be carried forward five taxable years following thetaxable year of the loss.
(b) (i) Subject to the other provisions of this section, a Utah net loss from a taxable yearbeginning on or after January 1, 1994, may be carried back three taxable years preceding thetaxable year of the loss and carried forward 15 taxable years following the taxable year of theloss.
(ii) If an election is made to forego the federal net operating loss carryback, a Utah netloss is not eligible to be carried back unless an election is made for state purposes.
(3) A Utah net loss shall be carried to the earliest eligible year for which the Utah taxableincome before net loss deduction, minus Utah net losses from previous years that were applied orrequired to be applied to offset income, is not less than zero.
(4) (a) Except as provided in Subsection (4)(b), the amount of Utah net loss that shall becarried to the year identified in Subsection (3) is the lesser of:
(i) the remaining Utah net loss after deduction of any amounts of the Utah net loss thatwere carried to previous years; or
(ii) the remaining Utah taxable income before net loss deduction of the year identified inSubsection (3) after deduction of Utah net losses from previous years that were carried orrequired to be carried to the year identified in Subsection (3).
(b) (i) The amount of Utah net loss carried back from a taxable year may not exceed$1,000,000 in Utah taxable income for each return filed under this chapter in a taxable year.
(ii) A Utah net loss in excess of $1,000,000 may be carried forward.
(iii) A remaining Utah net loss shall be available to be carried to one or more taxableyears in accordance with this section.
(5) (a) (i) Subject to Subsection (5)(a)(ii), a corporation acquiring the assets or stock ofanother corporation may not deduct any net loss incurred by the acquired corporation prior to thedate of acquisition.
(ii) Subsection (5)(a)(i) does not apply if the only change in the corporation is that of thestate of incorporation.
(b) An acquired corporation may deduct the acquired corporation's net losses incurredbefore the date of acquisition against the acquired corporation's separate income as calculatedunder Subsections (6) and (7) if the acquired corporation has continued to carry on a trade orbusiness substantially the same as that conducted before the acquisition.
(6) For purposes of Subsection (5)(b), the amount of net loss an acquired corporation thatis acquired by a unitary group may deduct is calculated by:
(a) subject to Subsection (7):
(i) except as provided in Subsection (6)(a)(ii), calculating the sum of:
(A) an amount determined by dividing the average value of the acquired corporation'sreal and tangible personal property owned or rented and used in this state during the taxable yearby the average value of all of the unitary group's real and tangible personal property owned orrented and used during the taxable year;
(B) an amount determined by dividing the total amount paid in this state during thetaxable year by the acquired corporation for compensation by the total compensation paideverywhere by the unitary group during the taxable year; and
(C) an amount determined by:
(I) dividing the total sales of the acquired corporation in this state during the taxable yearby the total sales of the unitary group everywhere during the taxable year; and
(II) (Aa) if the unitary group elects to calculate the fraction for apportioning businessincome to this state using the method described in Subsection 59-7-311(2)(d), multiplying theamount calculated under Subsection (6)(a)(i)(C)(I) by two;
(Bb) if the unitary group is required to calculate the fraction for apportioning businessincome to this state using the method described in Subsection 59-7-311(3)(a), multiplying theamount calculated under Subsection (6)(a)(i)(C)(I) by four; or
(Cc) if the unitary group is required to calculate the fraction for apportioning businessincome to this state using the method described in Subsection 59-7-311(3)(b), multiplying theamount calculated under Subsection (6)(a)(i)(C)(I) by 10; or
(ii) if the unitary group is required to calculate the fraction for apportioning businessincome to this state using the method described in Subsection 59-7-311(3)(c), calculating anamount determined by dividing the total sales of the acquired corporation in this state during thetaxable year by the total sales of the unitary group everywhere during the taxable year;
(b) dividing the amount calculated under Subsection (6)(a) by the same denominator ofthe fraction the unitary group uses to apportion business income to this state:
(i) for that taxable year; and
(ii) in accordance with Section 59-7-311;
(c) multiplying the amount calculated under Subsection (6)(b) by the business income ofthe unitary group for the taxable year that is subject to apportionment under Section 59-7-311;and
(d) calculating the sum of:
(i) the amount calculated under Subsection (6)(c); and
(ii) the following amounts allocable to the acquired corporation for the taxable year:
(A) nonbusiness income allocable to this state; or
(B) nonbusiness loss allocable to this state.
(7) The amounts calculated under Subsection (6)(a) shall be derived in the same manneras those amounts are derived for purposes of apportioning the unitary group's business incomebefore deducting the net loss, including a modification made in accordance with Section59-7-320.
Amended by Chapter 155, 2010 General Session
