C Corporation Net Capital Loss (NCL) Simulator
A C Corp's NCL is subject to a mandatory 3-year carryback and 5-year carryforward. Use this tool to calculate your estimated tax refund and carryforward loss to inform your strategy.
1. Enter Loss and Income Information
Past 3 Years (Carryback Period)
Next 5 Years (Carryforward Period)
2. Simulation Results
Tax Refund from Carryback
$0
Remaining Carryforward
$0
Expired Loss
$0
3. Year-by-Year Loss Utilization Timeline
Press the calculate button to see the yearly breakdown of loss utilization.
4. Key Rule Summary
Basic Principle: Capital Gain Limit & Short-Term Conversion
+A C corporation's capital losses can only offset capital gains, not ordinary income (IRC §1211(a)). Any net capital loss that is carried back or forward is always treated as a short-term capital loss, regardless of its original character (IRC §1212).
Carryover Rules: Mandatory "3-Back, 5-Forward"
+A net capital loss **must** first be carried back to the three preceding tax years, starting with the earliest year. Any remaining loss is then carried forward for up to five years. If not used within the 5-year carryforward period, the loss expires permanently. Unlike with Net Operating Losses (NOLs), there is no option to waive the carryback period.
Critical Trap: Carryback Cannot Create or Increase an NOL
+Under IRC §1212(a)(1)(A)(ii), a capital loss carryback cannot be used to the extent that it would create or increase a Net Operating Loss (NOL) in the carryback year. This means the actual tax refund from a carryback may be limited by the *total taxable income* of that year, not just its capital gains.