Discussion:NOL carryback, use 1040X or form 1045 ?

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Discussion Forum Index --> Tax Questions --> NOL carryback, use 1040X or form 1045 ?


Wkstaxprep (talk|edits) said:

13 March 2007

taxpayer has an NOL this year. I would like to carryback the loss to 2005. Although i can use a form 1045, application for quick refund, this form seems simple at first glance but its a little confusing for me (i've done a form 1045 befroe but i may be lsoing my marbles a bit at the peak of tax season).

I'd just as well use the 1040x amended return. I should be fine this way too, correct ?

By the way, is it me or is everyone else a little bit burned out earlier this tax season than usual :)

Will

Michaelstar (talk|edits) said:

13 March 2007
One can use Form 1045 for only the first year after the NOL was created. So if y/e is 12/31/2006 - you have until 12/31/2007 to file the 1045 otherwise it is a 1040x you must use. Refund from a 1045 is much faster than a 1040x. I would use the 1045 if I could.

Wkstaxprep (talk|edits) said:

13 March 2007
Thanks Mike

Taxea (talk|edits) said:

15 March 2007
You have to carryback to the first year either way. The 1045 will get you the refund quicker but you can't just carryback to 2005 if the carryback amount changes the 2003. You either carryback to 2003 and then 2004 and 2005 or you elect to carryforward. taxea

Michaelstar (talk|edits) said:

15 March 2007
Generally NOL's are carried back only two years - not three years. If NOL arose in 2006 you can only c/b to 2004, then forward if election to forgo the c/b was/is not made on timely filed t/r. There are certain situations when c/b can be three years but these are special circumstances.

Death&Taxes (talk|edits) said:

15 March 2007
1045 gets it done faster, but you must dot every 'i' and cross every 't' else it will be returned.

Michaelstar (talk|edits) said:

15 March 2007
One must be very detailed about this sort of thing - that is for sure.

Szptax (talk|edits) said:

29 April 2009
I prepared 1040x's for loss carrybacks. I know 1045 would be better but this is what the client wanted. Anyway..... I am confused about the schedule B of the 1045 versus the 1040x. Shouldn't the adjustments really mirror eachother. I was checking my work and I see that on the 1045 the adjustment to the Itemized Deductions is different. Sch B adds back his NOL from the tax year being adjusted (in this case the 2006 year) and the 1040x does not. In all other respects they are the same. Therefore the loss to be carried forward from the 1040x versus the 1045 is different. Maybe my brain has melted from the early heat wave.

Ucfaccountant (talk|edits) said:

29 April 2009
1045

WesR (talk|edits) said:

30 April 2009
Hi if you are an eligible small business you can elect to treat the CB period as 2-5 years and can start in any year and then go forward. This allows you to pick the best year for tax benefit. I assume you knew this starting in 2005 but one above didnt. Use 1045 bye

Harry Boscoe (talk|edits) said:

30 April 2009
Using Form 1045 and using Form 1040X to carryback an NOL are *not* the same thing. Yes, they should arrive at the same overpayment (or you're not "doing it right" on one of them) but one is an "application" for a "tentative" refund, and the other is an amended tax return, including a *claim* for a refund. Note, for example, that a paid preparer doesn't have to sign Form 1045: this is because it's not an income tax return, it's "only" an application for a tentative refund. The tax law doesn't see these two forms as the same.

I'm not sophisticated enough to know all the technical differences, but they are not the same thing under the tax laws.

The post above that got a different answer for the two approaches was clearly not "doing it right." Something about AGI limits, I think it was. There's only one correct answer.

Though there are two ways to get there, the two forms are *not* literally interchangeable. Form 1045 is *only* an application for a tentative refund - see the name of the form. Form 1040X, on the other hand, is an income tax return that's amending a prior year's return to claim an NOL deduction and to claim a refund of the resulting overpayment. A "claim for refund" is way higher in the pecking order than an "application" for a "tentative" refund.

Any tax law scholars within shouting distance should be able to identify the difference.

Csccpa (talk|edits) said:

1 June 2009
What if your 1045 was rejected for a math error? Do you have to file a 1040x to correct it? Or can you file a corrected 1045?

Harry Boscoe (talk|edits) said:

1 June 2009
My *intuition* is that if a 1045 is "rejected" for whatever reason, you oughta be able to file another one. Rejection of a 1045 should be - and this is my intuition, only my intuition - as if it hadn't even been received by IRS.

And I remember another of the differences between Form 1045 and 1040X for claiming an NOL carryback: When you file the 1040X, the IRS will owe you interest if they don't get your refund back to you within 45 days. The 1045 overpayment and refund never gets interest, because Form 1045 is not *really* a tax return claiming an overpayment.

JBinSC (talk|edits) said:

3 June 2009
I don't want to stray too far off-topic, but I have a related question. A client had an NOL in 2007 where we elected to forego the carryback period because there was no taxable income in 2005 or 2006 to offset. He has an NOL in 2008 as well. Can I carryback the 2007 and 2008 combined NOL to 2003, or am I limited to just the 2008 NOL?

Seaside CPA (talk|edits) said:

3 June 2009
Five year carryback is for the NOL generated in 2008.

Gar1976 (talk|edits) said:

4 June 2009
We use 1045, under the logic that doesn't filing an amended return re-start the three year statute of limitations?

Fsteincpa (talk|edits) said:

16 June 2009
I am past the date to file a 1045, so i must use the 1040X. I have a client with a casualty loss. Carries back to 2003 tax year.

Trying to figure out where in the 2003 Proseries tax program to enter the NOL Carryback. Instructions say to attach the 1045 Sch A and B <is applicable>

From a data entry standpoint, anyone know where to start my entry? Do I start with the 1045 Sch A

Rrcan (talk|edits) said:

16 June 2009
How does the AMT figure into the 1045 carryback?


Daven@daviscocpas.com (talk|edits) said:

24 February 2010
For an individual 2008 tax return with NOL I understand that it can be carried back 5 years but the 1045 has to be filed by 12/31/09. Are there any exceptions to this rule (revenue procedure, etc.). If not what are other options other than carrying it forward?

Trillium (talk|edits) said:

24 February 2010
Sec. 13 of the Worker, Homeownership and Business Assistance Act of 2009, guidance for which is provided in Rev. Proc. 2009-52.

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