Isn't this overkill?

[RitaB]

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.

[Gretel]

I know what you mean but they could win the lottery or inherit something unexpectedly, happens all the time, even happened to me as a child for a very small amount.

[Burke]

That happened to my client this year. He didn't win the lottery, but he finally gave up two losing businesses and went to work for a company who pays him good wages. We used up over $30K all in this year from prior year carryovers. Someone else did the prior years' returns. If that C/F had not been on last year's return, I would not have known about it. He never mentioned it and didn't have a clue until I pointed it out to him.

[Maribeth]

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.

[Burke]

And hope the prior preparer furnished all those worksheets/statements to the taxpayer with the return.

[RitaB]

Yep, thank you, I feel better

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.

Bingo. I was too lazy to look, but I thought that's what the instructions said years ago. I will look now that I don't think I'm crazy. Thank you, Maribeth.

Software is ATX, just sayin.

[taxea]

I put the full amount in and with a statement I back it out so that the carryover to the next year is documented. Also don't forget that it transfers to the State return which documents it there too.

[RitaB]

Gotcha

... Also don't forget that it transfers to the State return which documents it there too.

Tennessee. Can't use it.

[Maribeth]

Bingo. I was too lazy to look, but I thought that's what the instructions said years ago. I will look now that I don't think I'm crazy. Thank you, Maribeth.

Software is ATX, just sayin.

Yep, hope all is going well with you and ATX this year. Drake is doing well, it has some limitations, but it has excellent customer support. And I have found out that I do not need a forms-based entry! Who would have thunk, after all those years with ATX.

[RitaB]

Much better, thanks

Yep, hope all is going well with you and ATX this year. Drake is doing well, it has some limitations, but it has excellent customer support. And I have found out that I do not need a forms-based entry! Who would have thunk, after all those years with ATX.

It's much better, Maribeth. Glad you like Drake. I tried it Feb 2013, very briefly, and just could not take the fact that bank numbers didn't convert. At least they didn't for me. Anyway, I made it ok with ATX 2012 once I got Windows 7 Pro and a new computer. This year I'm happy.

[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.

[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.

[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]

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]

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.