A condo association has a federal net operating loss from prior years when it filed as a corporation (1120).
This year the condo association qualifies for homeowner association taxation (1120-H).
For the current year, the 1120-H tax is less than the 1120 tax, even if the NOL carryforward is deducted on the 1120. An NOL deduction is not allowed on an 1120-H.
Question: if the condo association files the 1120-H for the current year, what happens to the NOL carryforward? Since it cannot be deducted on the 1120-H, does it carryover in full to next year? Must it be reduced by the amount that would otherwise have been deducted on the 1120 return?
Thanks in advance.
This year the condo association qualifies for homeowner association taxation (1120-H).
For the current year, the 1120-H tax is less than the 1120 tax, even if the NOL carryforward is deducted on the 1120. An NOL deduction is not allowed on an 1120-H.
Question: if the condo association files the 1120-H for the current year, what happens to the NOL carryforward? Since it cannot be deducted on the 1120-H, does it carryover in full to next year? Must it be reduced by the amount that would otherwise have been deducted on the 1120 return?
Thanks in advance.