Discussion:New 5-year NOL Carryback
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| {{ForumReplyPost|UserID=RoyDaleOne|Date=9 March 2009|Text=The additional carryback periods are an option, and you must elect to use the extended caryback periods of 3 years, or 4 years, or 5 years.}} | {{ForumReplyPost|UserID=RoyDaleOne|Date=9 March 2009|Text=The additional carryback periods are an option, and you must elect to use the extended caryback periods of 3 years, or 4 years, or 5 years.}} | ||
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| + | {{ForumReplyPost|UserID=Sheldon|Date=21 March 2009|Text=Thanks for everyone's input here! | ||
| + | For those that did not catch it yet, there are new 1045 instructions that came out about March 16th on the IRS website. | ||
| + | |||
| + | I am going ahead with an election to carryback 3 years with a client that needs the funds and gets no tax benefit in years 4 & 5. | ||
| + | |||
| + | I waited some this week to see if my Proseries software updated their elections for section | ||
| + | 172(b)(1)(H), but I don't see it this week yet. | ||
| + | |||
| + | The way I understand the new 1045 instructions, you should attach an election to the 2008 return and it should be timely filed as to which year you are carrying back the NOL to. | ||
| + | |||
| + | I think I am going ahead with the election statement as follows. Any input is appreciated. | ||
| + | |||
| + | Election under code section 172(b)(1)(H) | ||
| + | |||
| + | The taxpayer hereby makes the election under | ||
| + | the newly created Code Section 172(b)(1)(H) | ||
| + | to elect a 3 year carryback period for the | ||
| + | 2008 NOL. | ||
| + | |||
| + | It seems to me that the IRS should accept a timely filed 1045 with the carry back as making the election or even on a 1040X if late as many taxpayers with losses are notoriously late in filing and many would not yet have been informed about the potential for additional carryback year options. Some of these won't show up to catch up on their taxes until next year. But time will tell if they are going to require proper elections or not. | ||
| + | |||
| + | I'll e-file the 1040 quite soon. I think many will also be interested in how fast the IRS processes these. I am holding off even doing a state filing, as I think many states may hesitate to go along with this carry back option. But we could use updates here on various states also. I am in Colorado. | ||
| + | |||
| + | Happy loss carry back times! | ||
| + | Sheldon}} | ||
| {{ForumReplyPost|UserID=Sheldon|Date=21 March 2009|Text=Thanks for everyone's input here! | {{ForumReplyPost|UserID=Sheldon|Date=21 March 2009|Text=Thanks for everyone's input here! | ||
Revision as of 17:10, 21 March 2009
Discussion Forum Index --> Advanced Tax Questions --> New 5-year NOL Carryback
Discussion Forum Index --> Tax Questions --> New 5-year NOL Carryback
| 24 February 2009 | |
| Sure enough, I have my first client who is eiligible for the 5-year NOL carryback that was part of the stimulus bill. Understandably, he really wants to get his refund ($70k+). The problem is, IRS has not issued any guidance or updated Form 1045 or 1040X. The bill speaks of taxpayers making an affirmative election with their 2008 return to apply the carryback to their choice of years 1-5. I'm inclined to create my own election text and file the 2008 return now, so my client can at least get his 2008 refund. Then, I suppose we have to wait to see if IRS issues any guidance for claiming the carry back. I can't imagine that a 1040X or 1045 would be approved until some guidance is issued. Any thoughts? My fear is that IRS drags its feet for months. | |
Chicagocpa1 (talk|edits) said: | 27 February 2009 |
| I have a client in the same position. She wants to file the 2008 return and needs the refund. I am having her holdoff to see what happens with the form. Though, I don't know how much longer that would be. | |
| 27 February 2009 | |
| What guidance do you need? You have a choice of carrying back 2,3,4, or 5 years if the client is an eligible small business. Carrying back one year is not one of the options. You can make the 3,4,5 election for FYE beginning in 2008 or FY ending in 2008, but not both. | |
| 27 February 2009 | |
| Have you checked to see whether it would actually take the past five years to completely use up the NOL? If I remember right, the last time we were allowed to carryback 5 years the 1045 still had only 3 columns. I would start with the 5th year back and use 2 1045 forms making sure to clearly state that pursuant to "cite" client has elected to go back 5 years. taxea | |
| 27 February 2009 | |
| Me too. Just looking for guidance as to making the election in the proper format. I'm assuming the 1045 will be allowed as long as we fill in the proper dates. | |
RoyDaleOne (talk|edits) said: | 27 February 2009 |
| Attach a statement to make the election. My software has most elections available by check mark but also has blanks you can fill in.
The way we use to do when there was only paper returns. | |
| 6 March 2009 | |
| You also have the option to go back and amend carryback claims or carryforward elections for fiscal years beginning in 2007. I believe that this must be done by April 18, 2009. | |
Anselmodon (talk|edits) said: | 9 March 2009 |
| When you say that we have the option to go back and amend carryback claims for FY2007+, you mean that it is just that...an option...correct?
I have a situation in which there was a NOL in TY 2007 which was carried back to TYs 2005,2006. There is now a NOL in TY 2008 and my understanding is that the loss can be carried back to 2003,2004. Is this correct? I would also assume that any aggregate remaining loss between TY's 2007+2008 would be carried forward together. | |
RoyDaleOne (talk|edits) said: | 9 March 2009 |
| The additional carryback periods are an option, and you must elect to use the extended caryback periods of 3 years, or 4 years, or 5 years. | |
| 21 March 2009 | |
| Thanks for everyone's input here!
For those that did not catch it yet, there are new 1045 instructions that came out about March 16th on the IRS website. I am going ahead with an election to carryback 3 years with a client that needs the funds and gets no tax benefit in years 4 & 5. I waited some this week to see if my Proseries software updated their elections for section 172(b)(1)(H), but I don't see it this week yet. The way I understand the new 1045 instructions, you should attach an election to the 2008 return and it should be timely filed as to which year you are carrying back the NOL to. I think I am going ahead with the election statement as follows. Any input is appreciated. Election under code section 172(b)(1)(H) The taxpayer hereby makes the election under the newly created Code Section 172(b)(1)(H) to elect a 3 year carryback period for the 2008 NOL. It seems to me that the IRS should accept a timely filed 1045 with the carry back as making the election or even on a 1040X if late as many taxpayers with losses are notoriously late in filing and many would not yet have been informed about the potential for additional carryback year options. Some of these won't show up to catch up on their taxes until next year. But time will tell if they are going to require proper elections or not. I'll e-file the 1040 quite soon. I think many will also be interested in how fast the IRS processes these. I am holding off even doing a state filing, as I think many states may hesitate to go along with this carry back option. But we could use updates here on various states also. I am in Colorado. Happy loss carry back times! Sheldon | |
| 21 March 2009 | |
| Thanks for everyone's input here!
For those that did not catch it yet, there are new 1045 instructions that came out about March 16th on the IRS website. I am going ahead with an election to carryback 3 years with a client that needs the funds and gets no tax benefit in years 4 & 5. I waited some this week to see if my Proseries software updated their elections for section 172(b)(1)(H), but I don't see it this week yet. The way I understand the new 1045 instructions, you should attach an election to the 2008 return and it should be timely filed as to which year you are carrying back the NOL to. I think I am going ahead with the election statement as follows. Any input is appreciated. Election under code section 172(b)(1)(H) The taxpayer hereby makes the election under the newly created Code Section 172(b)(1)(H) to elect a 3 year carryback period for the 2008 NOL. It seems to me that the IRS should accept a timely filed 1045 with the carry back as making the election or even on a 1040X if late as many taxpayers with losses are notoriously late in filing and many would not yet have been informed about the potential for additional carryback year options. Some of these won't show up to catch up on their taxes until next year. But time will tell if they are going to require proper elections or not. I'll e-file the 1040 quite soon. I think many will also be interested in how fast the IRS processes these. I am holding off even doing a state filing, as I think many states may hesitate to go along with this carry back option. But we could use updates here on various states also. I am in Colorado. Happy loss carry back times! Sheldon | |
