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Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

AGI Low Due to Loss Carried Forward?

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Question: If someone has a giant loss carry forward, like 500K, it’s going to take a while for that to no longer show on line 37. So would that person virtually be on Medi-Cal forever, or for subsidy eligibility, do loss carry forwards only count in the year in which the loss occurred?

Answer: Loss carry forwards do not only count in the year in which the loss occurred. There are two types of loss carry forwards and I am not sure which one you are referring to. A net operating loss (“NOL”) can be carried forward to offset future operating income for up to 20 years following the NOL year. A capital loss can be carried forward to offset capital gains or reduce ordinary income by a maximum of $3,000 per year indefinitely. As such, a NOL carry forward like $500,000 could count for 1 or 20 years whereas a capital loss like $500,000 could count for 1 to 167 years. Both types of loss carry forwards reduce a household’s modified adjusted gross income which is used to determine subsidy eligibility.

Thank you Steven C Stasoiski, Health Insurance and Tax Professional from Seal Beach, CA for this answer.


We have a rental property that has both a cash loss, plus depreciation of -$25,000 annually. Does that reduce my MAGI for the CoveredCA calculation?

Also, how should it be entered on the application. The CoveredCA website does not accept negative numbers!

How about a loss carry forward that comes from a theft loss? This creates a net loss on line 37 of our 1040.

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