Isn't this overkill?

[RitaB]

But thanks anyway

The state does use it if the state starts with the Fed AGI

It does not, see p. 2: http://tn.gov/revenue/forms/indinc/inc250.pdf

I know that you didn't mean eternity

Good, I'm glad, cause that was supposed to be in sarcasm font. Or facetious font.

[taxea]

2013 Farm Loss 8,000, interest income 200.

Unused NOL carried forward from 2012 5,000.

Unused NOL carried forward from 2011 4,000.

I have -9,000 on line 21. And -16,800 on line 22.


No, they don't need to carryback. Yes, I made up the numbers. Yes, they still have $17,000 to carry into eternity. I just started thinking isn't it unnecessary to enter the -9,000 on line 21? Things like this bother me, so I am bothering you.

I know that you didn't mean eternity....doesn't NOL have a recovery time limit?

[taxea]

Tennessee. Can't use it.

The state does use it if the state starts with the Fed AGI

[Maribeth]

Hmmmm . . . . that is interesting. That's the way I was taught, to make the intervening years calculation and put that amount on line 21. Never questioned it.

[Bees Knees]

However, if you read the instructions for puting an NOL on line 21, it indicates that you only put the amount that you are using on that line. Not the entire amount of the NOL c/f, only the amount that is being used in that year. You attach a supporting schedule to the return that shows the total NOL's available and the amounts used in prior years.

So if you are not using any of an NOL c/f in the current year, there should be no amount on line 21.

I disagree.

IRS Pub 536, page 8 says:

If you carry forward your NOL to a tax year after the NOL year, list your NOL deduction as a negative figure on the “Other income” line of Form 1040 or Form 1040NR (line 21 for 2013).

No mention of entering only the amount that is actually used for that year.

Likewise, the IRS Form 1040 instructions for line 21 says:

Net operating loss (NOL) deduction.
Include on line 21 any NOL deduction
from an earlier year. Subtract it from
any income on line 21 and enter the result.
If the result is less than zero, enter
it in parentheses. On the dotted line next
to line 21, enter “NOL” and show the
amount of the deduction in parentheses.

Again, no mention of entering only the amount that is actually used for that year.

What instructions are you referring to?

[RitaB]

You got hosed

I had a situation where a client never had income... One year he didn't call for an appointment and I didn't pursue it.

Bet he fell bass ackwards into the lottery and took his return and oar to Black Bart.

[Golden Rocket]

Eternal Reporting

I had a situation where a client never had any income. He lived at home with mom and dad and never worked for a W-2, nor anything productive on the farm.

But a relative had given him 50% ownership in a house, which he sold at a loss, so he had a capital loss rollforward every year. The carryforward is not necessarily the
excess of $3000, but could in some situations be all excess over taxable income (and there never was any).

I told the guy he had a choice:
1) Not filing because there wasn't sufficient income.
2) Filing to preserve a capital loss carryforward, so it could be used to offset future income.

For years and years he chose the latter. One year he didn't call for an appointment and I didn't pursue it.

[RitaB]

Yeah, there's that

It only makes sense to show it all on there. Especially if someone new picks up the return. As in my case, if it had not been on there in 2012, I would not have been alerted to the C/F at all, except for that year's NOL. Which was much, much less than the entire amount he was entitled to c/f, since the prior preparer did not furnish any of the worksheets to the TP.

Well, I do see your point. I always attach every worksheet and depreciation schedule to client copy, but not everybody does. (Not stupid stuff like page showing W-2 info. Hello, they can look at the W-2. I really hate sifting through THAT crap, BTW.)

[Burke]

They may have changed how the NOLs are reported. Two years ago I refigured NOLs back from inception (2005) since I didn't believe the clients TurboTax generated numbers and everything I researched led me to put the full NOL on line 21. And it calcs automatically after using the worksheet, so I'm not complaining. Only have done one so far this year, and it works pretty sweet in ATX.

It only makes sense to show it all on there. Especially if someone new picks up the return. As in my case, if it had not been on there in 2012, I would not have been alerted to the C/F at all, except for that year's NOL. Which was much, much less than the entire amount he was entitled to c/f, since the prior preparer did not furnish any of the worksheets to the TP.

[RitaB]

Yeah, I'm sticking with them

Doing a project like the one I did makes me appreciate the upgrades quite a bit! I'm doing a bunch of last minute 2010 amends, and I'm appreciating the new print manager quite a bit now.

I gotta work with print manager and the letters if I live thru the next week. Maribeth, and everybody, we really would love to see you on ATX Unofficial Forum. Don't let the name fool you, we have no standards over there.

[joanmcq]

Doing a project like the one I did makes me appreciate the upgrades quite a bit! I'm doing a bunch of last minute 2010 amends, and I'm appreciating the new print manager quite a bit now.

[RitaB]

Yes, the automation

They may have changed how the NOLs are reported. Two years ago I refigured NOLs back from inception (2005) since I didn't believe the clients TurboTax generated numbers and everything I researched led me to put the full NOL on line 21. And it calcs automatically after using the worksheet, so I'm not complaining. Only have done one so far this year, and it works pretty sweet in ATX.

I think that's why I was surprised - I didn't remember the ATX handling of NOL's being sweet at all. I have a feeling NOL's are about like depreciation; IRS is not trying too hard. We've all seen some humdinger depreciation errors and thought, "Whaaaat?" And, either way I do this, my statement explains that they have 17,000 unused NOL carry forward; it's clear enough. (I think.)

[joanmcq]

They may have changed how the NOLs are reported. Two years ago I refigured NOLs back from inception (2005) since I didn't believe the clients TurboTax generated numbers and everything I researched led me to put the full NOL on line 21. And it calcs automatically after using the worksheet, so I'm not complaining. Only have done one so far this year, and it works pretty sweet in ATX.

[RitaB]

Yep, it's all good

.. And it did that NOL just peachy...

Yeah, I've looked all over Pub 536, can't find what Maribeth and I both believe, maybe it's in another Pub, but I think I'm ok either way: Leave it like ATX did it, or not put anything on line 21.

[Burke]

I am using ATX again this year too. And a new computer with Windows 7. I made them give me a discount after all the hoopla last year. I am pretty happy with it again. And it did that NOL just peachy. Also it appears to be handling depreciation/disposals/etc just fine. Now, if I could just get a grip on the passive loss carryovers.