Tax Advantages, Bonus Depreciation, And Net Loss Carry Backs For 2009

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Effective November 6th, 2009 under the “Worker, Homeowner, and Business Assistance Act of 2009 – WHABBA for short”….all US Businesses of every size can now carry back Net Operating Losses (NOL’s) up to FIVE years. A Net Operating Loss is the excess of the taxpayer’s business deductions over its GROSS Income. The previous legislation allowed businesses with less than $15 Million in gross receipts to carry back a NOL two years.

IMPACT FOR BUSINESSES – A business that carries back a NOL to a prior profitable year can obtain a quick refund from the IRS for that prior year. This will provide additional cash that the business can use to pay expenses, maintain operations, and make new investments.

This is a MAJOR door opener for businesses that will show a NOL for 2009 to free up additional cash to re-invest in their facilities, etc. Obviously, a bigger NOL for 2009 carried back five years will result in additional cash refunded back to the customer from the IRS against previous taxes paid, etc.

EXAMPLE:

Acme Company         Taxable Income       NOL Schedule

2004 Profit                   $50 Million *                50% of the taxable income ($25 MM)

2005 Profit                   $50 Million                   $50 Million

2006 Profit                   $50 Million                   $25 Million

2007 Profit                   $50 Million

2008 Profit                   $50 Million

2009 NET LOSS         -$100 Million

  • * The ACME Company can carry back the 2009 NET LOSS (Dollar for Dollar) back five years….with the 5th year being limited to a 50% limitation on the available taxable income.
  • In the above example….Acme can carry back up to (5) years with the 5th year limited to 50% of the taxable income. So they can deduct $25 Million against the 2004 taxable income……fully offset the 2005 taxable income of $50 Million….and deduct an additional $25 Million against the 2006 taxable income reducing the NOL to zero…but also getting back CASH with the additional deductions against previously paid taxes on taxable income.

BOTTOM LINE….If the Business will show a NET LOSS for 2009, now is the time to purchase the V-Blox system…..add to the loss, get back more money in refunds, and have a system in place that will add to the bottom line from now into the future!