carryfoward loss

[theresa d]

need advice- new client- taxpayer had a large carryfoward loss into 2004. preparer last year calculated 2004 loss incorrectly and as a result the carryfoward loss to 2005 is incorrect. carryfoward loss per 2004 return is 119000 should be 145000. client is elderly and i don't think she will ever have enough gains to offset loss. don't want to charge her for an amended return that will probably never benefit her and an amended return will only change the carryfoward loss no other changes.

if i showed the carryfoward loss on 2005 at the correct amount do you think it will be picked up as different from 2004 return? if so i was thinking of just going with last year's number at this late date as it will probably never have any impact. or would you amend and charge her?

[Deltax]

need advice- new client- taxpayer had a large carryfoward loss into 2004. preparer last year calculated 2004 loss incorrectly and as a result the carryfoward loss to 2005 is incorrect. carryfoward loss per 2004 return is 119000 should be 145000. client is elderly and i don't think she will ever have enough gains to offset loss. don't want to charge her for an amended return that will probably never benefit her and an amended return will only change the carryfoward loss no other changes.

if i showed the carryfoward loss on 2005 at the correct amount do you think it will be picked up as different from 2004 return? if so i was thinking of just going with last year's number at this late date as it will probably never have any impact. or would you amend and charge her?

Amending would be the right thing to do.

Charging her is another ball game.

[Gretel]

Teresa, Brian is right BUT I was in this situation some years ago, worse than yours. Previous preparer didn't know how to deal with NOL's, none was carried over for years, so amending was out of the question.

I computed the correct amount and used on first return I did, expecting to get a letter from IRS and informed client of this. This is now four years ago, never heard anything back.

[theresa d]

thanks for the replies

i decided to amend the return and do it the right way. charged her a fee and explained it to her. she was fine with it. figured i didn't want the other preparer's error to become my headache down the road.

thanks for taking the time to respond when i know you're so busy. it really is wonderful to have others to bounce these situations off !!