NOL question

[Unregistered]

I have a question about how to calculate the NOL. Hope someone can help.

Assume that a taxpayer chose to have all his NOLs carried forward. Suppose he has $10,000 NOL carryover from 2004. Then in 2005 the taxpayer had an overall loss again and he incurred an additional $3,000 NOL. Does it mean he will have a total of $13,000 NOL carryover to 2006?

But then when I worked on Form 1045 Schedule A, the result on line 25 is only $3,000, which is the additional amount of NOL that the taxpayer incurred in 2005. Then what about the $10,000 NOL from 2004 that the taxpayer cannot use in 2005?

Is it because the $10,000 from 2004 can only be carried forward for one year and if you would lose it if you cannot use it in 2005?

Or the figure on Form 1045 Schedule A Line 25 is not the total amount of NOL allowed to be carried forward to 2006?

[Sam Slade]

Nol

Form 1045 is not used if taxpayer elects to forgo the carryback period. In this instance the NOLs are carried forward for 20 yrs and are deducted in the order they occurred. There are worksheets in Section 3 of Quickfinder for calculating the carryback/carryforward. I am sure there are similar worksheets in Taxbook.

[Unregistered]

Form 1045 is not used if taxpayer elects to forgo the carryback period. In this instance the NOLs are carried forward for 20 yrs and are deducted in the order they occurred. There are worksheets in Section 3 of Quickfinder for calculating the carryback/carryforward. I am sure there are similar worksheets in Taxbook.

Thank you, do you know if there is one which I can find on the net? Thank you.

[Bees Knees]

Thank you, do you know if there is one which I can find on the net? Thank you.

The worksheets are on page 3 and page 4 of Form 1045.

http://www.irs.gov/pub/irs-pdf/f1045.pdf

[Unregistered]

Thank you for your help.

One last question about how the NOL should be carryforwarded. Again we assume here that the taxpayer elects to carry forward the NOL in every year.

2003: 1,000 NOL elected to be carryforwarded.
2004: 2,000 NOL elected to be carryforwarded.

On line 21 of his 2005 Form 1040, does he enter 2,000 (the 2004 NOL) or 3,000 (the total accumulated 2003 and 2004 NOL) there? (entered as a negative amount)

[Bees Knees]

You would enter negative 3,000 on the 2005 Form 1040, line 21, with an explanation attached to the return of how that 3,000 was calculated. It may be as simple as saying:

2003 NOL Carryforward to 2005 = 1,000
2004 NOL Carryforward to 2005 = 2,000

Total NOL Carryforward to 2005 = 3,000

[kellyoakes]

If he's able to use the entire amount (3K), report that number on line 21. I usually attach a schedule to this type of return detailing the NOL per year, any used, and remaining NOL available to future years.

[Unregistered]

What about if he again has an overall loss in 2005 and therefore cannot use any of the prior years NOL carryforward. In this case, does he still enter the 1,000 NOL from 2003 and 2,000 NOL from 2004 on line 21 of his 2005 Form 1040?

[Unregistered]

Can someone take the last question? Thank you.

[Unregistered]

Yes, Prior nol's that are carriede forward goes on line21(form 1040) as a negative. The current nol is added to this amount and all are carried forward to 2006