Pass through Entities Losses
The distributive share of net losses of partnerships, corporation of individuals and special partnerships may be used to offset up to 90% of the distributive share of net income from pass through entities. Before the amendment, the limit was 80%.
Corporations
Net operating loss carryovers may be used to offset up to 90% of the current year net income. Before the amendment, the limit was 80%.
The deduction of capital losses carryover will be limited to 90% of the capital gains for the year. Before the amendment, the limit was 80%.
For net operating losses carryover purposes, the disallowance of expenses paid or incurred to related entities not engaged in trade or business in Puerto Rico and not subject to withholding is no longer applicable.
