If I have an NOL arising in a taxable year beginning in 2018, 2019, or 2020, and also have one or more section 965 years in the carryback period, how do I elect to exclude only the section 965 years from the carryback period

To elect to exclude only the section 965 years from the carryback period for an NOL arising in a taxable year beginning in 2018, 2019, or 2020, you must follow the procedures outlined in Rev. Proc. 2020-24 and the relevant sections of the Internal Revenue Code.

1. Election to Exclude Section 965 Years:
   • Under § 172(b)(1)(D)(v)(I), you can elect to exclude all section 965 years from the carryback period for an NOL arising in a taxable year beginning in 2018, 2019, or 2020.
2. When to File:
   • For an NOL arising in a taxable year beginning in 2018 or 2019, the election must be made no later than the due date, including extensions, for filing your Federal income tax return for the first taxable year ending after March 27, 2020.
   • For an NOL arising in a taxable year beginning after December 31, 2019, and before January 1, 2021, the election must be made by the due date, including extensions, for filing your Federal income tax return for the taxable year in which the NOL arises.
3. What to File:
   • Attach an election statement to the earliest filed of:
     1. The Federal income tax return for the taxable year in which the NOL arises.
     2. The taxpayer's claim for tentative carryback adjustment (Form 1045 or Form 1139).
     3. The amended Federal income tax return applying the NOL to the earliest taxable year in the carryback period that is not a section 965 year.
4. Content of the Election Statement:
   • The election statement must state that you are electing to apply § 172(b)(1)(D)(v)(I) under Rev. Proc. 2020-24, the taxable year in which the NOL arose, and identify the taxpayer's section 965 years.
5. Effect of the Election:
   • By making this election, you can disregard the section 965 years when applying the NOL to the carryback period and determining whether you have an overpayment and can receive a refund or credit for any of the remaining years in the carryback period to which the NOL is applied.
6. Irrevocability:
   • Once made, the election is irrevocable.

By following these steps, you can effectively exclude section 965 years from the carryback period for your NOL.

Sources:
Rev. Proc. 2020-24
§ 172. Net operating loss deduction
§ 965. Treatment of deferred foreign income upon transition to participation exemption system of taxation
Rev. Proc. 2021-14
Rev. Proc. 2018-58
Rev. Proc. 82-25
Rev. Proc. 88-15