Originally Posted by PurpleRoses
Hello: my boyfriend and I got married this year; last year his farming business generated a NOL (he filed single) and he elected for the remaining NOL to carry-forward for this year, which now we will be filing married filing jointly. We were told that his NOL could be applied to our combined income(mine from W2) and this would possibly produce a refund of all the tax i paid in for this year. Of course i am now reading the IRS publications and they specifically mention the change in filing status compared to the year the NOL occurred, and that it can only be applied to the farming income because we were not married the year the NOL occurred? Very confused. . .and unhappy if we were advised incorrectly.
as you said, Special rules apply for figuring the NOL carrybacks / carryovers of married people whose filing status changes for any tax year involved in figuring an NOL carryback or carryover. As you and your spouse, your BF, filed separate returns for a carryback year, in this case 2015 tax year, but filed a joint return for any or all of the tax years involved in figuring the NOL carryover, you need to figure each of your carryovers separately; so I mean on your 2015 return, you can not claim the NOL from your BF?s Sch F on your return . on your 2015 W2 earned income. So, you have the option of applying your NOL only to future tax years. This is called carrying a NOL carry forward. You can carry the NOL forward for up to 20 years and use it to reduce your taxable income in the future. When you do this, you must attach a statement that includes a computation showing how you figured the NOL deduction. If you deduct more than one NOL in the same year, your statement must cover each of them. UNLESS you file a separate return your 2016 return . When the 2016 return is prepared, the NOL?d be used on your 2016 joint return;