For the 2015 individual tax prep, I inherited a client who for 2014 was a married couple and had a $5K NOL for 2015 with the election to carryback. To my knowledge, they did not file a Form 1045 or 1040X for any of the two carryback years. Now, in 2015, the couple divorced and I'm preparing the tax return for the wife. Is there a way for me to use any of the $5K NOL? Maybe attach a statement with an election to only carryforward and then split it 50/50? Any insight appreciated.
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"The hardest thing in the world to understand is the income tax" - Albert Einstein -
She's Outa Luck
It is my understanding that an NOL is automatically carried back two years unless an election is made to carry forward. If I am correct, then failure to carry back to 2012 does not carry the right to carry forward to 2015. The time limit for filing an amended 2012 return has just about expired.
The failure to make a timely election to carry forward "might" be salvageable by filing an amended 2014 return, but I'm not certain of this. Maybe someone else can help with this.
If the NOL is only $5K, and the possibility of another alienated party in the person of ex-husband, I'm not sure it would be worth the administrative hurdling or not.
I'm not the foremost authority on this - hopefully someone else may comment. -
I agree with Snaggletooth. It's too late to do anything besides carry it back, so the only way to do anything is to amend the 2012 return to use it.Comment
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Thank You
Good insight!! Just needed a reality check. Thanks again. Have a good day."The hardest thing in the world to understand is the income tax" - Albert EinsteinComment
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you need to look at the prior returns especially the one for the year of the NOL.Believe nothing you have not personally researched and verified.Comment
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