# years for Investment Interest Cfw?

[John of PA]

How many years can 1040 Sch A (form 4952) Investment Interest be carried forward? I'am trying to figure out why Lacerte will only carry it forward for one year.

[Gene V]

Investment interest

John, I use Lacerte and it carries investment interest forward year after year, I wish there
Was a way to look at your file, and then we could figure out why it isn’t carrying the interest forward.

There is no limit to carrying investment interest forward at far as I know.
The interest carried over is treated as investment interest paid or accrued in that next year.

[Bees Knees]

TTB, page 4-13, "There is no limit on how many years it can be carried forward."

[John of PA]

Lacerte

John, I use Lacerte and it carries investment interest forward year after year, I wish there
Was a way to look at your file, and then we could figure out why it isn’t carrying the interest forward.

There is no limit to carrying investment interest forward at far as I know.
The interest carried over is treated as investment interest paid or accrued in that next year.

Gene,
Does Lacerte print out a schedule detailing which years the carryforwards apply to (Investment Interest). I have not seen one. I am questioning whether it's really only bringing forward the previous year and you don't realize this.

[John of PA]

I see that.

Thank you Bees Knees, I now see that in TTB. I'll have to call Lacerte. I have a return that has been cummulating unused Investment interest for 3 years now, and I assume the carryforward should be cummulating and growing each year, but Lacerte is only bringing forward the previous year. This return has had zero tax liability so the investment interest expense was not needed, but it will be needed in the future.

[Gene V]

Carry over

John, Lacerte carries over the number that is on Line 7 of form 4952, Line 7 is your total current year and disallowed prior year investment interest. Your disallowed prior year is printing on Line 2 form 4952. Therefore, I would say yes; Lacerte does carry over the interest properly, unless I’m reading this wrong.

Gene

[Kram BergGold]

Zero tax ?

Maybe investment interest has to be used against investment income regardless of the tax and this is why some was used up..

[John of PA]

Not fair!

Thank you Gene. I think Kram may be onto something here. I am assuming that none of the investment interest should be being used becasue taxable income is negative without deducting any investment interest; however perhaps the software is still using some of the investment interest becasue the law states it has to. Not fair, but I'll look into this to see if thats what's happening.

[Unregistered]

Thank you Gene. I think Kram may be onto something here. I am assuming that none of the investment interest should be being used becasue taxable income is negative without deducting any investment interest; however perhaps the software is still using some of the investment interest becasue the law states it has to. Not fair, but I'll look into this to see if thats what's happening.

No less fair than losing Charitable Contributions when you don't itemize.

[John of PA]

2 different types of carryforwards

Maybe investment interest has to be used against investment income regardless of the tax and this is why some was used up..

I believe part of the confusion here is there are 2 different types of carryforwards. 1) When there was not enough Investment Income, so the margin interest expense deduction is limited and thus an excess is carryfwd. 2) When there is not enough taxable income to use up the deduction, in this case can that unused investment expenses (margin interest) be carryforward, perhaps not? The return at question here has both these types of unused investment interest expense.