I'm not sure what I dislike more NOL's or the AMT.
Taxpayer, a rancher, buys cattle in December and pays for them in January. He adds the cattle to his depreciation schedule in both years (2004 and 2005). He had a small profit in 2004 and an NOL in 2005. He took SL depreciation on the cattle and if he removed the cattle from the 2005 return he would still have an NOL, just a smaller one.
My question is do I need to amend the 2005 return and report the change in the NOL even though it doesn't change his taxes or should I just adjust the NOL to the correct amount to carry to 2006 where it will be used up?
Taxpayer, a rancher, buys cattle in December and pays for them in January. He adds the cattle to his depreciation schedule in both years (2004 and 2005). He had a small profit in 2004 and an NOL in 2005. He took SL depreciation on the cattle and if he removed the cattle from the 2005 return he would still have an NOL, just a smaller one.
My question is do I need to amend the 2005 return and report the change in the NOL even though it doesn't change his taxes or should I just adjust the NOL to the correct amount to carry to 2006 where it will be used up?
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