Page:United States Statutes at Large Volume 104 Part 2.djvu/940

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104 STAT. 1388-532 PUBLIC LAW 101-508 —NOV. 5, 1990 "(11) a C corporation making distributions with respect to, or redeeming, its stock in connection with an excess distribution, or "(III) a C corporation which is a successor of a corporation described in subclause (I) or (II), " (iv) OTHER DEFINITIONS. — "For deHiiitions of terms used in this subparagraph, see subsection (h). " (2) AMOUNT OF CARRYBACKS AND CARRYOVERS. — The entire amount of the net operating loss for any taxable year (hereinafter in this section referred to as the 'loss year') shall be carried to the earliest of the taxable years to which (by reason of paragraph (1)) such loss may be carried. The portion of such loss which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of such loss over the sum of the taxable income for each of the prior taxable years to which such loss may be carried. For purposes of the preceding sentence, the taxable income for any such prior taxable year shall be computed— "(A) with the modifications specified in subsection (d) other than paragraphs (1), (4), and (5) thereof, and "(B) by determining the amount of the net operating loss deduction without regard to the net operating loss for the loss year or for any taxable year thereafter, and the taxable income so computed shall not be considered to be less than zero. "(3) ELECTION TO WAIVE CARRYBACK.— Any taxpayer entitled to a carryback period under paragraph (1) may elect to relinquish the entire carryback period with respect to a net operating loss for any taxable year. Such election shall be made in such manner as may be 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 for which the election is to be in effect. Such election, once made for any taxable year, shall be irrevocable for such taxable year." (b) CONFORMING AMENDMENTS.— (1) Section 172 is amended by striking subsections (g), (h), (i), and (k), and by redesignating subsections (j), (1), (m), and (n) as subsections (f), (g), (h), and (i), respectively. (2)(A) Subsection (f) of section 172 (as redesignated by paragraph (1)) is amended to read as follows: "(f) RULES RELATING TO SPECIFIED LIABILITY Loss.— For purposes of this section— "(1) IN GENERAL. —The term 'specified liability loss' means the sum of the following amounts to the extent taken into account in computing the net operating loss for the taxable year: (A) Any amount allowable as a deduction under section 162 or 165 which is attributable to— "(i) product liability, or "(ii) expenses incurred in the investigation or settlement of, or opposition to, claims against the taxpayer on account of product liability. "(B) Any amount (not described in subparagraph (A)) allowable as a deduction under this chapter with respect to a liability which arises under a Federal or State law or out of any tort of the taxpayer if—