Net operating loss carrybacks and carryovers

(A) General rule A net operating loss for any taxable year— (i) shall be a net operating loss carryback to the extent provided in subparagraphs (B), (C)(i), and (D), and (ii) except as provided in subparagraph (C)(ii), shall be a net operating loss carryover— (I) in the case of a net operating loss arising in a taxable year beginning before January 1, 2018 , to each of the 20 taxable years following the taxable year of the loss, and (II) in the case of a net operating loss arising in a taxable year beginning after December 31, 2017 , to each taxable year following the taxable year of the loss.

(B) Farming losses (i) In general In the case of any portion of a net operating loss for the taxable year which is a farming loss with respect to the taxpayer, such loss shall be a net operating loss carryback to each of the 2 taxable years preceding the taxable year of such loss. (ii) Farming loss For purposes of this section, the term “farming loss” means the lesser of— (I) the amount which would be the net operating loss for the taxable year if only income and deductions attributable to farming businesses (as defined in section 263A(e)(4)) are taken into account, or (II) the amount of the net operating loss for such taxable year. (iii) Coordination with paragraph (2) For purposes of applying paragraph (2), a farming loss for any taxable year shall be treated as a separate net operating loss for such taxable year to be taken into account after the remaining portion of the net operating loss for such taxable year. (iv) Election Any taxpayer entitled to a 2-year carryback under clause (i) from any loss year may elect not to have such clause apply to such loss year. Such election shall be made in such manner as prescribed by the Secretary and shall be made by the due date (including extensions of time) for filing the taxpayer’s return for the taxable year of the net operating loss. Such election, once made for any taxable year, shall be irrevocable for such taxable year.

(C) Insurance companies In the case of an insurance company (as defined in section 816(a)) other than a life insurance company, the net operating loss for any taxable year— (i) shall be a net operating loss carryback to each of the 2 taxable years preceding the taxable year of such loss, and (ii) shall be a net operating loss carryover to each of the 20 taxable years following the taxable year of the loss.

(D) Special rule for losses arising in 2018, 2019, and 2020 (i) In general In the case of any net operating loss arising in a taxable year beginning after December 31, 2017 , and before January 1, 2021 — (I) such loss shall be a net operating loss carryback to each of the 5 taxable years preceding the taxable year of such loss, and (II) subparagraphs (B) and (C)(i) shall not apply. (ii) Special rules for REITs For purposes of this subparagraph— (I) In general A net operating loss for a REIT year shall not be a net operating loss carryback to any taxable year preceding the taxable year of such loss. (II) Special rule In the case of any net operating loss for a taxable year which is not a REIT year, such loss shall not be carried to any preceding taxable year which is a REIT year. (III) REIT year For purposes of this subparagraph, the term “REIT year” means any taxable year for which the provisions of part II of subchapter M (relating to real estate investment trusts) apply to the taxpayer. (iii) Special rule for life insurance companies In the case of a life insurance company, if a net operating loss is carried pursuant to clause (i)(I) to a life insurance company taxable year beginning before January 1, 2018 , such net operating loss carryback shall be treated in the same manner as an operations loss carryback (within the meaning of section 810 as in effect before its repeal) of such company to such taxable year. (iv) Rule relating to carrybacks to years to which section 965 applies If a net operating loss of a taxpayer is carried pursuant to clause (i)(I) to any taxable year in which an amount is includible in gross income by reason of section 965(a), the taxpayer shall be treated as having made the election under section 965(n) with respect to each such taxable year. (v) Special rules for elections under paragraph (3) (I) Special election to exclude section 965 years If the 5-year carryback period under clause (i)(I) with respect to any net operating loss of a taxpayer includes 1 or more taxable years in which an amount is includible in gross income by reason of section 965(a), the taxpayer may, in lieu of the election otherwise available under paragraph (3), elect under such paragraph to exclude all such taxable years from such carryback period. (II) Time of elections An election under paragraph (3) (including an election described in subclause (I)) with respect to a net operating loss arising in a taxable year beginning in 2018 or 2019 shall be made by the due date (including extensions of time) for filing the taxpayer’s return for the first taxable year ending after the date of the enactment of this subparagraph.