Yikes! Taxpayer with 1040X has NOL carryback

[Penelope]

I posted a question a few days ago about what to attach to the 1040X (needed to correct overstatement of Sch C income for 2003).

Now after getting final 2005 info from client, I see they have an NOL to be carried back to 2003!

1) Should I put everything on the 1040X?

2) Or file the 1040X to correct the Sch C problem (with many other schedules being affected), and also file 1045, carrying back the loss to the CORRECTED 1040 figures for 2003?

I vote for Option 2, because

a) The 1040X is all done (!!!) and

b) It leaves a clearer picture (in my opinion) of the two separate events (correction of error on Sch C) and carryback of NOL.

Thanks, again, for your feedback.

Penelope

[Bill Tubbs]

Option 2

>>2) Or file the 1040X to correct the Sch C problem (with many other schedules being affected), and also file 1045, carrying back the loss to the CORRECTED 1040 figures for 2003?<<

I would go with Option 2. Though, I would attach a note to the 1045 that the 2003 1040X was mailed on October XX, 2006, and mail the 1045 no sooner than mailing the 2003 so that the 2003 1040X has a chance of being processed before the 1045.

Bill

[Penelope]

Thank you, Bill.

Thanks for the reminder to time the filings correctly, and to attach an explanation to the 1045.