Discussion:NOL carryback or carryforward
From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.
From TaxAlmanac
(Difference between revisions)
| Revision as of 01:22, 26 March 2008 Actionbsns (Talk | contribs) (Thanks for the f) ← Previous diff |
Revision as of 17:57, 5 March 2009 Sheldon (Talk | contribs) (NOL carryback option on number of years?) Next diff → |
||
| Line 24: | Line 24: | ||
| {{ForumReplyPost|UserID=Actionbsns|Date=26 March 2008|Text=Thanks for the feed back, that's exactly what I needed to know. Now I can finish her return and bill it out!}} | {{ForumReplyPost|UserID=Actionbsns|Date=26 March 2008|Text=Thanks for the feed back, that's exactly what I needed to know. Now I can finish her return and bill it out!}} | ||
| + | |||
| + | {{ForumReplyPost|UserID=Sheldon|Date=5 March 2009|Text=2009 law change now allows a "maximum" 5 year carryback. So my question is whether it is mandatory or if you still have the 2 year option. In my client's case there is no tax savings in year 4&5, so I would like a 3 year carryback best, but not sure how to interpet the explanations that I have seen thus far. Any additional insight into the new change on this is appreciated as I may wait until it is more clear.}} | ||
Revision as of 17:57, 5 March 2009
Discussion Forum Index --> Tax Questions --> NOL carryback or carryforward
| 1 February 2006 | |
| IF a C-corp has a NOL which is smaller than the prior year's income and there is no other NOL used to reduce the prior year's income, what would be the difference in carrying back the NOL and carrying it forward. If electing to carryback this year, does this block carryforward of future years' NOL's | |
| 1 February 2006 | |
| In addition to the above information, the C-corp is late filing it's prior year returns - 03 and 04. NOl is in 04 | |
| 1 February 2006 | |
| You must simply reduce the NOL c/f by the amount that would have been absorbed had the c/b claim been filed. | |
Msmith7305 (talk|edits) said: | 3 February 2006 |
| You do not elect to carryback. Carryback to (in general) the 2nd prior year with any unused NOL going then to the 1st prior year is mandatory UNLESS you elect to forego the carryback. The election will be found as a checkbox on the 1120. You just need to decide which gives you the bigger bang for the buck. | |
Actionbsns (talk|edits) said: | 25 March 2008 |
| My S corp client has a loss of $33K on her K-1 this year, she has basis, so the loss is allowed. Can we carry that back three years on her 1040? If so, can I take the loss on form 1045 which seems to be geared more to casualty losses, but I'm not positive of that, it would be the easiest method if I can do it. If I can carry it back three years, will she be able to apply more than $3,000 to the 2004 return? That's the year with the most benefit, 05 and 06 have nominal income because of real estate losses. If I can do this the way I'd like to be able to, she should get a refund of $4,000 or so. | |
| 26 March 2008 | |
| The total loss would be recognized in the current year which would reduce other "passive, non-passive" income then if any loss on 1040, then that would be carried back. You cannot just select how much you want to carry back, you carry back the amount of loss which reduces income for that year, then remaining loss is carried forward until fully used up. | |
| 26 March 2008 | |
| You need to calculate her individual NOL on Form 1045, Schedule A to determine if she has an NOL. The fact that the S corporation has a loss doesn't necessarily mean that she does; the S corp loss could be fully or partially absorbed by current income. If she has an NOL on Line 25 of that form, then it can be carried back 2 years (to 2005) and any amount not absorbed in those years can be carried forward 20 years.
The 3-year carryback is limited to casualty losses and losses of farmers and small businesses from Presidentially declared disasters. See IRC Sec. 172(b)(1)(A) and Sec. 172(b)(1)(F). | |
Actionbsns (talk|edits) said: | 26 March 2008 |
| Thanks for the feed back, that's exactly what I needed to know. Now I can finish her return and bill it out! | |
| 5 March 2009 | |
| 2009 law change now allows a "maximum" 5 year carryback. So my question is whether it is mandatory or if you still have the 2 year option. In my client's case there is no tax savings in year 4&5, so I would like a 3 year carryback best, but not sure how to interpet the explanations that I have seen thus far. Any additional insight into the new change on this is appreciated as I may wait until it is more clear. | |
