Sec. 40. (a) The term “separately stated net operating loss” means a federal net operating loss, or a portion of a federal net operating loss, determined according to the Internal Revenue Code that is:

(1) computed as an allowable federal net operating loss with regard to a taxable year; and

(2) required to be carried forward or carried back under the Internal Revenue Code;

regardless of whether the taxpayer had federal taxable income for the year of the loss.

     (b) A separately stated net operating loss for a taxable year includes:

(1) an excess business loss for the taxable year under Section 461(l) of the Internal Revenue Code;

(2) a federal net operating loss for a trade or business that is not allowable in the taxable year in which the loss was incurred as a result of the application of Section 512(a)(6)(C) of the Internal Revenue Code, with the federal net operating loss determined separately for each trade or business; and

(3) a federal net operating loss that is not affected by excess inclusion income under Section 860E of the Internal Revenue Code.

     (c) For purposes of IC 6-3-2-2.5 and IC 6-3-2-2.6, a separately stated net operating loss must be expressed as a negative number.

As added by P.L.194-2023, SEC.10.