GA NOL Carryforward

[TomJ]

Assuming one makes the election to forego the carryback of a NOL and has to carry it forward, but the NOL is for GA only (not a Federal NOL), where does it get entered on the next year's GA return? Other Subtractions Statement, Line 17, just write in "NOL carryforward"? I can only find information on carrying it back using Form 500-NOL, but that doesn't help for carrying forward.

Thanks,
Tom

[Snaggletooth]

Georgia People Out There

Tom, I've noticed no one has responded yet. Most of us (like myself) are not well-versed on taxation outside our home state. Georgia preparers can respond better.

Are you sure that Georgia even allows a carryforward election? That might be one reason why you can find the provision on the form..

[TAXNJ]

Some info

Some info and great recommendation by Snaggletooth. Also contact any Georgia tax associations

[geekgirldany]

Look at page 2 of Form 500-NOL, it gives information on carryforward losses...except it calls them carryovers.

[TomJ]

Thanks for the responses.

A little more background as this probably applies to more states than just GA and perhaps someone familiar with another state's process will be of help in figuring out GA's. The source of the GA NOL was Sch E losses (rental property) for a non-GA resident. When the property is eventually sold, because GA uses the Federal Sch D to determine capital gain income (which includes unrecaptured 1250 gain), if the annual GA NOLs aren't tracked and carried forward, then the taxpayer will seemingly pay GA income tax on capital gain that includes the unrecaptured 1250 gain, even though he never got the benefit of the depreciation each year because it generated a NOL each year. I imagine this would be true for any state that uses Federal Sch D to determine capital gain/loss.

On the GA 500-NOL, it's clear than an election to forego the two-year carryback can be made (default to the Fed election if made, but if not, a separate election can be made for GA purposes). Form GA 500-NOL is used to claim refund for years in which a NOL is carried back. For carry forwards, or "carryovers" as GA calls them, Form 500-NOL is not used. Instead, the NOL amount should be entered on the tax return for the carryover year. From the 500-NOL instructions:

"Please note that the amount from line 9 of the year directly preceding the loss year is the amount (if any) that can be carried to the year after the loss year (carryover year). The same adjustments from this schedule must be made to each year in the carryover period to determine the amount that is available to be carried to the next carryover year. For example, a taxpayer has a loss from 2013 which has a two year carryback period. The loss is carried back to 2011 and 2012 on page 1 but not all of the loss is utilized. The taxpayer makes the adjustments as required to 2011 and 2012 in the Net Operating Loss Carryover schedule at the top of page 3. After computing the amount for 2012 there is a positive amount on line 9 of the 2012 column. This amount can be carried to 2014 and should be listed on the 2014 return not on Form 500-NOL. If not all of the loss is utilized in 2014, the taxpayer should make the same adjustments to 2014 as are listed in the Net Operating Loss Carryover
schedule on page 3 to determine if any loss is available to be carried to 2015. A schedule showing this should be attached to the 2014 return and should not be listed on the Form 500-NOL"

The part that I don't know is where on the GA tax return one should enter a previous year NOL carryover. I'm searching several other sources as well, and will report back when I find the answer. If anyone else knows, I'm all ears!

Thanks,
Tom

[Golden Rocket]

Don't Know Either

I dunno either (of course), but I think you might be looking in the wrong place.

I suspect you are looking for an NOL, but according to what you say Georgia does not call it that. Instead Georgia insists on an accumulation of disallowed losses simply because they are in another state. You are meticulously calculating these "adjustments" every year.

For the year in question, if these adjustments can be disgorged, simply make the adjustments in whatever direction does so. If the property is being disposed, then there will be adjustments to BOTH Sch E income and Sch D Capital Gains (more appropriately the 4797 if Georgia has such a thing).

[TAXNJ]

Call

When you Reference Ga. Code Ann. § 48-7-21. Does it address your issue? Do not think your issue is unique.

To take the guessing out of the post, have you called the GA Division of Tax and/or a GA tax association?

[TomJ]

GA Dept of Rev was not helpful. They had no idea what I was talking about. I can't say I'm surprised. I'm not a member of any GA tax associations. However, one of my other resources suggested that the best place for it is an Other Subtraction on Schedule 1 since it is an adjustment to income based on GA law and that's what Schedule 1 is for. I was leaning that way myself and suspect that's what I will do (perhaps after one more try with the DOR). I'll attach a note to the return showing where the NOL comes from (year and type), stating that the carryback period was waived with a proper election, and showing the carryover into the future year (since this will go on, likely until the property is sold).

Thanks to all those who provided suggestions.

[TAXNJ]

Almost last resort

GA Dept of Rev was not helpful. They had no idea what I was talking about. I can't say I'm surprised. I'm not a member of any GA tax associations. However, one of my other resources suggested that the best place for it is an Other Subtraction on Schedule 1 since it is an adjustment to income based on GA law and that's what Schedule 1 is for. I was leaning that way myself and suspect that's what I will do (perhaps after one more try with the DOR). I'll attach a note to the return showing where the NOL comes from (year and type), stating that the carryback period was waived with a proper election, and showing the carryover into the future year (since this will go on, likely until the property is sold).

Thanks to all those who provided suggestions.

Sounds like a plan. If that is your position and you can defend it. Also, would you consider writing the dept of revenue mentioning the clerk answering your question said "They had no idea what I was talking about" and that you are requesting an official ruling/clarification (part of your support) ?

[Richard]

Line 11, but where from?

Reviving this thread as I'm struggling with a Georgia NOL.

It seems clear to me that the carryover is put on Schedule 1 line 11.

What I can't seem to get is where to find the Georgia NOL amount on the prior year's (2014) return? Might it be the net taxable income? I'd expect my software to generate something if required, and I'm confident the number will be different from the federal due to depreciation items.