C Corp. NOL Carryback/forward

[Bird Legs]

This is a new client. I am working on the 2004 form 1120.
In reviewing the 2003 return, discovered that the corp. had a NOL carryforward from prior years of 60,000. for the year ended 12-31-03, there was a net loss of $9000. making a total loss of 69,000.
The preparer did not check the box to forego the NOL carryback period on the 2003 return. Under normal circumstances this would mean that the 2003 NOL would have to be carried back and amended returns filed. The 2003 return was timely filed with extension.
Apparently the NOLs started in 2000. Copy of the 2002 1120 shows a NOL of $26,000.
with $35,000. carried over from previous.
Can I forget about the 2003 NOL and just carry it forward, even though the box was not checked to forego the carryback period?
Thanks for your help.

[Armando Beaujolais]

This is a new client. I am working on the 2004 form 1120.
In reviewing the 2003 return, discovered that the corp. had a NOL carryforward from prior years of 60,000. for the year ended 12-31-03, there was a net loss of $9000. making a total loss of 69,000.
The preparer did not check the box to forego the NOL carryback period on the 2003 return. Under normal circumstances this would mean that the 2003 NOL would have to be carried back and amended returns filed. The 2003 return was timely filed with extension.
Apparently the NOLs started in 2000. Copy of the 2002 1120 shows a NOL of $26,000.
with $35,000. carried over from previous.
Can I forget about the 2003 NOL and just carry it forward, even though the box was not checked to forego the carryback period?
Thanks for your help.

You can't increase a current year corporate NOL by a carryover.

IRC section 172(b)(3) says the election to waive the carryback "...shall be made by the due date (including extensions)..."

[Bird Legs]

Armando, The NOL

is on the 2003 form 1120. The question is, since the election to forego the carryback period, on a timely filed 2003, with extension, return, was NOT made, not checked, then
is it required that the NOL be carried back, even though the carryback years had losses?
Year 1999 NOL $ 32.
Year 2000 NOL 13,123.
Year 2001 NOL 22,004.
Year 2002 NOL 25,784.
Year 2003 NOL 6,025.

Can the 2003 NOL just be carried forward, along with the unused NOLs from prior years,
even though the election to forego the carryback period was not elected?
Just an oversight on the preparers part.
Excuse me if I am rambling too much but am physically & mentally tired.
Thanks to all of you. You'all have been a tremendous help.

[Bees Knees]

The NOL must be carried back 2 years and then forward. It may seem silly, but those are the rules.

However, you only file Form 1139 or Form 1120X if the NOL changes the tax liability for those tax years. So since those were also NOL years, you don’t file any extra returns. The procedure is to simply attach a detailed computation of the NOL carrybacks and carryovers for each year on your 2004 return.

It’s the same thing as just carrying it forward, but you have to go through the motions and compute the amounts going back and then forward. All it does is just increase the number of computations you do on the explanation statement attached to the 2004 tax year return.

[Bird Legs]

Thanks a million, Bees Knees and Armando, your assistance is greatly appreciated.