How have tax rules on net operating loss carrybacks/forwards affected Trump-related loss deductions from 2015–2020?
Executive summary
The interaction of three major tax-law changes — pre‑2018 carryback rules, the 2017 Tax Cuts and Jobs Act (TCJA) limit on carrybacks and 80% offset, and the CARES Act’s temporary, retroactive restoration of five‑year carrybacks for 2018–2020 — materially changed how large losses could be converted into refunds or later deductions, and those shifts shaped the timing and magnitude of any Trump‑related NOL tax benefits tied to the 2015–2020 period [1] [2] [3]. Public reporting ties a very large earlier carryback (roughly $700 million of losses from 2009 producing a $70.1 million refund to years 2005–2007) to Mr. Trump’s tax history, but contemporary NOL policy changes in 2018–2020 — not that 2009 carryback — determined the options available for losses occurring during 2018–2020 and thus how deductions could be recognized or refunded [4] [2].
1. How the rules changed: TCJA’s clampdown, then CARES Act’s reprieve
TCJA eliminated routine carrybacks for NOLs arising in tax years beginning in 2018 and thereafter and limited NOL deductions to 80% of taxable income, shifting benefit value forward rather than back [1] [3]. By contrast, the CARES Act (March 2020) temporarily and retroactively allowed NOLs arising in 2018, 2019, and 2020 to be carried back up to five years and suspended the 80% limitation for those years, creating one‑time opportunities to amend prior returns and claim refunds from higher tax years [2] [5] [6].
2. What that meant for timing and dollar flow for Trump‑related losses
If losses tied to Trump entities were generated in 2018–2020, the CARES Act gave a pathway to pull tax relief into earlier, higher‑rate years — accelerating refunds versus waiting to absorb those losses against future income — while TCJA rules otherwise would have forced a forward‑looking deduction with potentially lower present value [2] [3]. Public reporting documents a separate, earlier mechanics: a roughly $700 million loss in 2009 appears to have been carried back to 2005–2007 producing a $70.1 million refund, an example of how large historical carrybacks have produced major refunds in Trump‑era reporting, but that event predated the TCJA/CARES sequence that governed 2018–2020 choices [4].
3. Elections, exclusions and strategic choices taxpayers could (and did) make
Taxpayers had meaningful elections: the CARES Act required taxpayers to carry back 2018–2020 NOLs to the five preceding years by default but allowed an election to waive the carryback entirely or to exclude Section 965 inclusion years from the carryback period — choices that materially affect whether a taxpayer receives immediate refunds or preserves losses for future offset; these elections had filing deadlines and procedural traps [5] [7]. That means the same underlying loss could produce either an immediate refund (if carried back) or be banked as a carryforward, and forensic tax reporting must look at which elections were made to understand the ultimate tax impact [5] [6].
4. Statute‑of‑limitations and audit consequences that affect reported refunds
Large carrybacks create audit and statute‑of‑limitations complications: carryback refunds can extend assessment periods and trigger years‑long IRS scrutiny; the IRS internal guidance shows amended carrybacks can change refunds for earlier years and reopen liability questions, a dynamic cited in reporting on prolonged IRS review of Trump’s returns where carrybacks and carryforwards complicated the audit timelines [8] [4]. Thus a headline refund figure can mask ongoing adjustments, offsets for other liabilities, or later reductions — all legally plausible and visible in IRS procedures [8].
5. What reporting does — and does not — establish about 2015–2020 specifically
Available sources document the legal framework and a large earlier carryback tied to Mr. Trump’s tax history, but they do not comprehensively map every Trump‑related loss event and election for each year 2015–2020; public accounts that assert specific refund outcomes for 2018–2020 require confirmation of which NOLs were generated, whether the CARES Act carryback was elected or waived, and whether refunds were applied against other liabilities [4] [5]. In short, the law changed the menu of options — TCJA narrowed them, CARES temporarily reopened a powerful carryback route for 2018–2020, and statutory/audit interactions mean reported Trump‑era deductions and refunds must be traced to elections and IRS adjustments rather than assumed at face value [1] [2] [8].