Client had NOL in 2008, which I elected to carryforward. Client had larger tax liability in 2007, but carrying back 08NOL to 07 first would have used it all up with little tax savings, so I carried forward. Now in 09, another NOL. Not as large, but can I now carry the 09 NOL to 07 and continue to carryforward the 08 NOL? Do I file an amended 07 1040 with the loss carryback? Or do I file a 1045? TTB says either to carryback. Which is better?
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I think you can do it, but...
I think you can do it, but why is it good to carry back the 2009, when it wasn't good to carry back the 2008? 1045 gets a quicker response, so long as you are within the time limits for filing it.Evan Appelman, EA -
If I carried back the 08 NOL to 06, it was all used up with little tax benefits, nothing to carryforward to 07. Carrying back the 09 to 07 gives more tax benefits, more income and taxes in 07. What are the time limits for filing 1045? Can each year's NOL be decided separately from another. Am I allowed to carryforward the 08 NOL and carryback the 09 NOL? You said 1045 gets a quicker response than 1040X? I have not filed a 1045 before, so I'm not familiar with the form or the details. If the entire NOL is used up in 07, only one column is filled out?Comment
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Form 1045
The deadline for filing Form 1045 is 12 months after the close of the tax year that created the NOL. So if it was a 2009 NOL you have 2+ months to get the work done. And if 2007 consumes the entire NOL then only the one column is required.Comment
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