Can anyone give me a direction as to how an S corp can elect to carryback a NOL loss for a five year period. I have found form 1139 but I do not think an S corp can use this application for a tentative refund. Any advice on how to proceed would be greatly appreciated.
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Last edited by dor1500; 03-04-2010, 09:03 AM. -
An S Corporation passes its net operating loss through to the shareholders on Schedule K-1. The shareholders in turn deduct the loss on their individual return. If that loss contributes to a net operating loss on the shareholder’s individual return, he/she then can make the election to carry the loss back 5 years. -
I realize they get a K1 and the loss flows through to the personal taxes, (there is only 1 shareholder) but to take the NOL back 5 years do I amend personal taxes for previous 5 years to take NOL back, not sure how to proceed.... 2005 and 2006 S Corp showed a profit and beginning in 2007 when the auto industry began to slip it has been showing a loss....Comment
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The 2005 and 2006 S Corporation returns are not relevant. Once the loss on the K-1 passes through to the shareholder in the current year, it is a 1040 issue, not an 1120S issue. It is the 1040 returns for 2005 and/or 2006 that get amended for the loss carryback, assuming the K-1 loss in the current year creates an NOL on the current year 1040.Comment
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