I 111th CONGRESS 1st Session H. R. 561 IN THE HOUSE OF REPRESENTATIVES January 15, 2009 Ms. Markey of Colorado (for herself, Ms. Bean, and Mr. Hodes) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to allow a 5-year carryback of certain net operating losses, and for other purposes.

1.

Carryback of certain net operating losses allowed for 5 years; temporary suspension of 90 percent AMT limit

(a)

Five-year carryback of net operating losses

Subparagraph (H) of section 172(b)(1) of the Internal Revenue Code of 1986 is amended to read as follows: (H)

Temporary 5-year carryback of losses

In the case of a net operating loss for any taxable year ending during 2001, 2002, 2008, or 2009, subparagraph (A)(i) shall be applied by substituting 5 for 2 and subparagraph (F) shall not apply. . (b)

Temporary Suspension of 90 Percent Limit on Certain NOL Carrybacks and Carryovers

(1)

In general

Subsection (d) of section 56 of such Code is amended by adding at the end the following new paragraph: (3)

Additional adjustments

For purposes of paragraph (1)(A), the amount described in clause (I) of paragraph (1)(A)(ii) shall be increased by the amount of the net operating loss deduction allowable for the taxable year under section 172 attributable to the sum of— (A)carrybacks of net operating losses from taxable years ending during 2008 and 2009, and (B)carryovers of net operating losses to taxable years ending during 2008 or 2009. . (2)

Conforming amendment

Subclause (I) of section 56(d)(1)(A)(i) of such Code is amended by inserting amount of such before deduction described in clause (ii)(I). (c)

Effective dates

(1)

Subsection (a)

(A)

In general

Except as provided in subparagraph (B), the amendments made by subsection (a) shall apply to net operating losses arising in taxable years ending in 2008 or 2009. (B)

Election

In the case of an taxpayer with a net operating loss for a taxable year ending during 2008— (i)any election made under section 172(b)(3) of the Internal Revenue Code of 1986 may (notwithstanding such section) be revoked before November 1, 2009, and (ii)any election made under section 172(j) of such Code shall (notwithstanding such section) be treated as timely made if made before November 1, 2009. (2)

Subsection (b)

The amendments made by subsection (b) shall apply to taxable years ending after December 31, 1997.