Under IRC section 170(d)(2)(B), a corporation’s current year charitable contribution must be reduced by a corresponding increase in the corporation’s NOL carryover. To derive Oregon taxable income, the amount by which a corporation reduces its charitable contribution shall be subtracted from federal taxable income.

Example: ABC corporation has current year federal taxable income (pre-NOL application) of $100,000 and NOL carry forward amounts from prior years of $120,000. The corporation has a current year charitable contribution of $15,000. Since the NOL application exceeds taxable income, ABC’s otherwise deductible $10,000 charitable contribution is converted to an additional NOL carry forward under IRC section 170(d)(2)(B). The remaining $5,000 excess contribution may be carried forward for five years under IRC section 170(d)(2)(A).

For Oregon, ABC corporation reports federal taxable income (pre-NOL application) of $100,000 in the current year. The $10,000 reduction of the federal charitable contribution is shown as an “other subtraction” on the Oregon return. The remaining $5,000 excess charitable contribution is carried forward as under federal law.

Statutory/Other Authority

ORS 305.100

Statutes/Other Implemented

ORS 317.307

History

Renumbered from 150-317.307, REV 68-2016, f. 8-15-16, cert. ef. 9-1-16
RD 6-1996, f. 12-23-96, cert. ef. 12-31-96