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Old 08-01-2014, 02:47 PM
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NOL problem

I have had to amend a client's 2011 1040 with a large 4797 loss which caused a NOL. Because the original 1040 had been late-filed, I took the loss back 2 years, and there is still more to carry forward and apply for 2012. The 2012 1040 is also being filed late and has another substantial loss which will be a separate NOL.
Question: There is no point in carrying the 2012 NOL back to 2010 and 2011 because of the prior NOL carryback, but because it is late-filed am I obligated to do so?
Thanks for any help.
AMENDED QUESTION: Sheesh!! This is really confusing. After reading another post on an NOL, I'm wondering if I can skip the 2011 carryback to 2009. I assumed that I would have to since the carryforward deadline was past. Can I carryback 1 year to the 2010 1040X, for which (I believe) the refund statute would be 10-15-14.
OR...can I just carryforward the 2011 loss to 2012 and file a 1040X for 2012.
OR...is this all a lost cause?
Thanks.


Last edited by Judith : 08-01-2014 at 06:06 PM. Reason: More info


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Old 08-02-2014, 03:22 AM
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Quote:
Originally Posted by Judith View Post
I have had to amend a client's 2011 1040 with a large 4797 loss which caused a NOL. Because the original 1040 had been late-filed, I took the loss back 2 years, and there is still more to carry forward and apply for 2012. The 2012 1040 is also being filed late and has another substantial loss which will be a separate NOL.
Question: There is no point in carrying the 2012 NOL back to 2010 and 2011 because of the prior NOL carryback, but because it is late-filed am I obligated to do so?
Thanks for any help.
AMENDED QUESTION: Sheesh!! This is really confusing. After reading another post on an NOL, I'm wondering if I can skip the 2011 carryback to 2009. I assumed that I would have to since the carryforward deadline was past. Can I carryback 1 year to the 2010 1040X, for which (I believe) the refund statute would be 10-15-14.
OR...can I just carryforward the 2011 loss to 2012 and file a 1040X for 2012.
OR...is this all a lost cause?
Thanks.
Question: There is no point in carrying the 2012 NOL back to 2010 and 2011 because of the prior NOL carryback, but because it is late-filed am I obligated to do so?=========>>>>>> I do not think so; no provision to be obligated to c/b nol due to late filed return.TPs elect to forgo the carryback period by attaching a stmt to the tax return that produced the NOL. Once made, the election to forgo the carryback of an NOL is final; when 2011 return showing a NOL is filed without such a stmt. IRS assumes the TP is carrying back the NOL to the 2009 tax year.I guess this is what you did in 2011 with a large 4797 loss which caused a NOL.However, for your 2012 NO: deduction, you also have the option of waiving your carryback period(to 2010/2011) and using all your losses going forward for up to 20 years after 2012. after you commit to this decision, you can't change your mind if your business doesn't do as well as you expect.For 2012 you can’t file form 1045 as 2011 return showing a NOL , so you need to use to file only form 1040X to deduct 2012 NOL.in your case , 2012 NOL’d be automatically C/F to 2013(along with the other remaining NOL c/f from 2010)



Thanks for any help.
AMENDED QUESTION: Sheesh!! This is really confusing. After reading another post on an NOL, I'm wondering if I can skip the 2011 carryback to 2009. I assumed that I would have to since the carryforward deadline was past. Can I carryback 1 year to the 2010 1040X, for which (I believe) the refund statute would be 10-15-14.OR...can I just carryforward the 2011 loss to 2012 and file a 1040X for 2012.=====>> I think so. You need to claim NOL on 2010 by amending 2010 return; Just add the excess NOL from 2010 and 2011 and claim it on the 2012 return. however, the NOL calculation from an otherwise closed year is still open for review by the IRS if related to an audit in an open year where the NOL was deducted. the IRS may examine any closed year in which an NOL was generated or carried to for purposes of determining the proper amount to carry forward to an open year. the auditor does not review the full tax return for the year in which the NOL was created unless they find big problems with the year they are auditing



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