59-7-110.  Utah net loss — Carry forward — Deduction.

(1)  A taxpayer shall determine the amount of Utah net loss that the taxpayer may carry forward to offset income of another taxable year as provided in this section.

Terms Used In Utah Code 59-7-110

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Business income: means the same as that term is defined in Section 59-7-302. See Utah Code 59-7-101
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Corporation: includes :
(a) entities defined as corporations under Sections 7701(a) and 7704, Internal Revenue Code; and
(b) other organizations that are taxed as corporations for federal income tax purposes under the Internal Revenue Code. See Utah Code 59-7-101
  • Income: includes losses. See Utah Code 59-7-101
  • Personal property: includes :Utah Code 68-3-12.5
  • Personal property: All property that is not real property.
  • State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
  • taxable year: includes the period for which such return is made. See Utah Code 59-7-101
  • Taxpayer: means any corporation subject to the tax imposed by this chapter. See Utah Code 59-7-101
  • Unitary group: includes a captive real estate investment trust. See Utah Code 59-7-101
  • Utah net loss: means the current year Utah taxable income before Utah net loss deduction, if determined to be less than zero. See Utah Code 59-7-101
  • Utah taxable income: includes income from tangible or intangible property located or having situs in this state, regardless of whether carried on in intrastate, interstate, or foreign commerce. See Utah Code 59-7-101
  • Utah taxable income before net loss deduction: means apportioned income plus nonbusiness income allocable to Utah net of related expenses. See Utah Code 59-7-101
    • (2)  Subject to the other provisions of this section, a taxpayer:

    (a)  may carry forward a Utah net loss from a taxable year beginning on or after January 1, 2008, to a future taxable year until the Utah net loss is exhausted; and

    (b)  may not carry back a Utah net loss from a taxable year.

    (3)  A taxpayer that carries forward a Utah net loss shall carry forward the Utah net loss to the earliest eligible year for which the Utah taxable income before net loss deduction, minus Utah net losses from previous years that a taxpayer applied or was required to apply to offset income, is not less than zero.

    (4) 

    (a)  Subject to Subsection (4)(b), the amount of Utah net loss that a taxpayer may carry 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 that a taxpayer carried to previous years; or

    (ii)  the remaining Utah taxable income before net loss deduction of the year identified in Subsection (3) after deduction of Utah net losses from previous years that a taxpayer carried or was required to carry to the year identified in Subsection (3).

    (b) 

    (i)  For a Utah net loss carried forward to a taxable year beginning on or after January 1, 2023, the amount of Utah net loss that a taxpayer may carry forward to a taxable year may not exceed 80% of Utah taxable income calculated before deducting any Utah net loss from Utah taxable income.

    (ii)  A taxpayer may carry a remaining Utah net loss to one or more taxable years in accordance with this section.

    (5) 

    (a) 

    (i)  Subject to Subsection (5)(a)(ii), a corporation acquiring the assets or stock of another corporation may not deduct any net loss incurred by the acquired corporation prior to the date of acquisition.

    (ii)  Subsection (5)(a)(i) does not apply if the only change in the corporation is that of the state of incorporation.

    (b)  An acquired corporation may deduct the acquired corporation’s net losses incurred before the date of acquisition against the acquired corporation’s separate income as calculated under Subsections (6) and (7) if the acquired corporation has continued to carry on a trade or business substantially the same as that conducted before the acquisition.

    (6)  For purposes of Subsection (5)(b), the amount of net loss an acquired corporation that is acquired by a unitary group may deduct is calculated by:

    (a)  subject to Subsection (7):

    (i)  calculating the sum of:

    (A)  an amount determined by dividing the average value of the acquired corporation’s real and tangible personal property owned or rented and used in this state during the taxable year by the average value of all of the unitary group’s real and tangible personal property owned or rented and used during the taxable year;

    (B)  an amount determined by dividing the total amount paid in this state during the taxable year by the acquired corporation for compensation by the total compensation paid everywhere by the unitary group during the taxable year; and

    (C)  an amount determined by dividing the total sales of the acquired corporation in this state during the taxable year by the total sales of the unitary group everywhere during the taxable year; or

    (ii)  if the unitary group is required or elects to calculate the fraction for apportioning business income to this state using the method described in Subsection 59-7-311(2), calculating an amount determined by dividing the total sales of the acquired corporation in this state during the taxable 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 of the fraction the unitary group uses to apportion business income to this state for that taxable year in accordance with Section 59-7-311;

    (c)  multiplying the amount calculated under Subsection (6)(b) by the business income of the 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 manner as those amounts are derived for purposes of apportioning the unitary group’s business income before deducting the net loss, including a modification made in accordance with Section 59-7-320.

    Amended by Chapter 506, 2023 General Session

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