Discussion:NOL carryforward
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Discussion Forum Index --> Advanced Tax Questions --> NOL carryforward
Discussion Forum Index --> Tax Questions --> NOL carryforward
| 3 February 2009 | |
| Hello,
My client gifted, to her daughter, a 3plex in Florida that she has owned for about 10 years. She accumulated an NOL of over $40,000. Does she get to continue using the NOL in the future (opted out of carryback) years on her return or does it end with the gift? Thank you for your help. sadonald, EA | |
| 4 February 2009 | |
| Did the transfer of this property wipe out her basis? If so, I would say no continuing basis, no NOL. taxea | |
| 4 February 2009 | |
| I don't see how gifting away some property will cause her to lose her NOL. The NOL was generated, presumably, by the excess of annual expenses over annual income from operating the property. There's nothing I'm aware of that says you can't use an NOL simply because there is no basis left in the assets which were used to generate it. Otherwise people who've had massive business losses would be barred from using any NOL carryovers once those business assets were sold or repo'd. Bottom line: she owned the property when the NOL was generated, she gets to use the NOL carryforward. | |
| 4 February 2009 | |
| I was thinking along the lines of having included the loss in the basis somehow causing it to affect the transfer value. In which case the NOL would be no longer. taxea | |
Death&Taxes (talk|edits) said: | 4 February 2009 |
| Is this really an NOL or an unused passive loss carryover {form 8582]? | |
| 4 February 2009 | |
| Thanks for all your responses. (new member)
It is really an NOL created by excessive expenses over profits for the length of time she owned the property. Her basis was approximately $60,000.00 (downpayment) when she gifted the triplex and her entire interest of $60,000 to the daughter. She has no more basis. The consensus of opinions seems to be that she loses the remaining NOL created, however, taxtamer disagrees & created some doubt. Anymore answers? You guys are great....thanks for taking your time to help. | |
| 4 February 2009 | |
| Sadonald, mother will not lose the NOL as a result of gifting the property. Taxtamer gave you the correct advice. Incidentally, the daughter's basis will not be $60,000. For depreciation purposes, daughter's basis will be the lower of mother's basis (including debt assumed by daughter) or the fair market value of the property on the date of the gift. | |
| 4 February 2009 | |
| Thank you for the clarification Riley2. I really appreciate you helping me with this question.
This has been a super experience using the Tax Almanac & getting the answer from the pro's. | |
