1040 NOL rules - elections

[LCP]

Does filing a 2004 tax return late (ie in the next few days) affect your ability to:

1. Elect to waive an NOL carryback period - does not timely filing the return mean you didn't make the election timely?

or

2. Carry the NOL back? - As best I can see you still have 3 years from the original due date but we seem to recall having the entire NOL disallowed because the NOL year was not filed timely.

[Bees Knees]

TTB, page 8-16, "A taxpayer can elect to not carry the NOL back, but only carry the NOL forward...The election must be made on an original return filed by the due date (including extensions). If the taxpayer fails to file the return on time with this election, the taxpayer must carry the NOL back under the carry back rules, even if no benefit is derived by carrying the NOL back."

As for the three year statute of limitations, TTB, page 15-5 says, "If a claim for refund relates to an overpayment attributable to an NOL carryback, the period for filing for a refund ends three years after the due date (including extensions) for the taxable year of the NOL."

So in other words, even though the carry back year may be a closed tax year, an NOL carried back to that year can still generate a refund in that year provided the tax year that calculated the NOL is still an open year.