NOL Election - new legislation

[duanecpa]

The President signed legislation allowing for the carryback of a NOL that is created in 2008 back 5, 4,3, 2 years.

It is my understanding that this election must be made by 4/17/2009. Does anyone know how this is done?

Thank you.

[Maribeth]

The election is done on Form 1045. Attach the election or put at the top of the 1045, filed pursuant to the new law. See Rev Proc 2009-19 for specific details.

Maribeth

[AZ-Tax]

NOL - Rev. Proc. 2009-19

[QUOTE=duanecpa;80327]The President signed legislation allowing for the carryback of a NOL that is created in 2008 back 5, 4,3, 2 years.

Every where I read about the 2009-19 it states the TP has the option to a 5,4,3 or 2 yr carryback. So if a TP has a 2008 (orginal return) form 1045 1a NOL, can they elect to go back and start with tax year 2006?

[WhiteOleander]

AZ, that's way I have read it. I think the point was to give the t/p the option of going back further if there was a refund available there. So if going back 5 years wouldn't get any money, they don't have to go back that far. They could just go back 4 or 3 years.

I think the theory is to get some revenue the businesses can put into their company and hopefully hang on.

[BHoffman]

http://www.irs.gov/pub/irs-drop/rp-09-26.pdf

Hoping this link helps.

[Harvey Lucas]

The instructions on form

1045 (for 1040 nol's), and 1139 (for Corporation nol's) are pretty good, albeit cumbersome.

For 1040 nol's, if you waived the carryback period on the original 1040, ie, with a 172(b)(3) election, you could have changed that to a 3,4, or 5 year carryback by filing a 1045 or 1040x, but you had to do it before April 17, 2009. If you did not, you are sol on the 3,4,5 nol.

If you did not file a 172(b)(3) election on your original 2008 1040, you are still eligible to file for a 3,4,5 nol but you must file an amended 2008 1040 to attach the 3,4,5 election statement.

You have 6 months from April 17, 2009 to do this. You have to write "filed pursuant to section 301.9100-2" on the election statement.

After you have done that, you still have to file the actual 1045 carryback application.

See page 5 of the 1045 instructions.

Similar procedures for corporation nol's are found in the instructions for form 1139.

Harvey Lucas