Discussion:Net operating loss carry forward amount

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Discussion Forum Index --> Tax Questions --> Net operating loss carry forward amount

FrankF (talk|edits) said:

14 March 2007
Here is the scenario:
  • Farmer has a loss in 2004, say it's -$10,000.00, with an election to carry forward.
  • Farmer reports NOL in 2005, but last preparer puts only about half, say -5,131.05 on the return. (It is not obvious where this number comes from. It doesn't seem to be a function of any other number on the return.) Farmer owes $2,000.00.
  • I re-input the 2005 return with no change in final results (still owes $2,000.00), but NOL figure is much different, say it's -$9,750.00 with more carry-over of -$250.00.
  • The dilemma is what number to put on the 2006 return for NOL carry-over. Is there still $10,000.00 - 5,131.05 = 4,868.95 NOL to take? Or do we need to consider that the 2005 return really should have left only $250.00 NOL to take?
  • To me Sec. 172(b)(2) says to me that the taxpayer shall take as much of the NOL as may be available when carrying it to the next year. The worksheet in Proseries tends to support that. I'm inclined to take the smaller number to be on the safe side. Thoughts?

Kevinh5 (talk|edits) said:

14 March 2007
If you use the worksheet provided with Form 1045, or the NOL module in Tax Tools software, it will help you figure out how much was used each year.

FLORAB (talk|edits) said:

25 March 2008

Bjeter (talk|edits) said:

25 March 2008
IT DEPENDS. Stop yelling. Is it a farm loss or a loss from a business? Have you carried back the NOL yet? Did you elect to forego the carryback period? Is the loss in a corporation or is it being reported on a 1040?

KCGuy (talk|edits) said:

13 May 2008
If a sole prop is showing a NOL on form 1045 then do I to enter that carry forward number in next year's 1045 as carried forward from the previous year...I would assume that software will automatically carry it forward but Ido not see that...Is it becuase all three years tax return I am doing is showing NOL and there is not negative AGI...any comments...

Kevinh5 (talk|edits) said:

15 May 2008
Tax software is no substitute for a good tax professional.

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