NOL DTA - Consolidated Return
 

We have two life companies that comprise our life group on our consolidated tax return. One of the companies has a small NOL this year that will be offset against the other life company income for a net gain for the life group.

My question is how do we report this on the provision for the NOL company. Do we report the NOL as a DTA even though it's being offset on a consolidated basis? If we do report the NOL, do we show it as reversing in 1 year and then reverse the whole thing out as provision-to-return adjustment when the return is filed?

Thanks!

Rebecca,

Yes, report the NOL as a DTA on the NOL company's tax provision regardless of how it might be used on the consolidated return. Statutory provisions are to be done on a standalone basis. See also the guidance provided in SSAP 101, footnote 2 to paragraph 7. Q&A #8 may also prove helpful.

Regards,
Lisa Mullen
Regulatory Education Director