Wednesday, April 23, 2008
New Tax Law Allow Companies to Carry Back Mortgage Loans Losses
The Internal Revenue Service withdrew proposed regulationsthat had asserted that mortgage loans are capital assets and anylosses from them could be used only to offset capital gains. Theagency also said it wouldn't challenge companies that count suchlosses against ordinary income. Tax law generally allows companies to ``carry back'' losses realized this year to previous years and get a refund for earlier taxes paid or apply them to later years, known as a ``carryforward'' to reduce future liability. Carry backs currently are limited to two years; the Senate legislation would temporarily expand that to four. A House panel passed a separate relief measure that doesn't contain the provision.