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Old 02-23-2014, 07:45 PM
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Can you claim a lost car where you are the lienholder on the lease?

This question is in regards to my boss. The auto shop I work at opened in 2012. In 2013, my boss lost almost $32,000 because of people disappearing with the cars while on lease. The question is, if the cars were worth $32,000 and he only received $5,000 (estimated numbers), would he claim his personal income minus the $27,000 or should he do a Tax Loss Carryback since he made profit in 2012?



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Old 02-24-2014, 07:40 AM
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Quote:
Originally Posted by o8oo0880oo8o View Post

#1;This question is in regards to my boss. The auto shop I work at opened in 2012. In 2013, my boss lost almost $32,000 because of people disappearing with the cars while on lease. The question is, if the cars were worth $32,000 and he only received $5,000 (estimated numbers), would he claim his personal income minus the $27,000

#2; or should he do a Tax Loss Carryback since he made profit in 2012?
#1; Claiming the loss reduces his biz taxable income by the amount of the loss, thereby reducing the gross income ,net earnings reported on sch c line 29, 31, figure used to calculate taxes owed.

#2;It depends; aslongas the loss causes NOL, then yes, he may file form 1045 to figure the NOL and carry back.he can carry back the NOL to the prior 2 years or only to future years for 20 years. He needs to base this decision on what you anticipate his tax to be in the future years compared to the rates in the prior years.so he can deduct the NOL in the carry back years if it is to his tax advantage to do so. If the NOL is not completely absorbed in the prior years,he can carry over the unused NOL to future years



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