NOL carryover

[Gretel]

I like to get back to a post some month ago regarding NOL carryover and the correctness of the NOL worksheet in ProSeries.

The problem, I am having, is to determine how much of the NOL has been used up.

Until recently I was pretty sure that standard/itemized deductions will not contribute to use up the NOL but I might be wrong.

Here are some numbers to work with.

AGI -56758
non-bus. income 681
standard deduction 5150
exemption 3300
NOL carryover -60666
taxable income -65208

None of the NOL should be used up but if the NOL worksheet in ProSeries is followed, $3,227 will be used up. I believe the worksheet is OK for the original NOL but not a basis for the carryover. What do you think?

Thank you.
Gabriele

[Maribeth]

Gabriele, my calculation agrees with you that none of the NOL carryforward is used up in the current intervening year.

I figured that the current year AGI before the NOL deduction is 3,908. This is offset by the s/d and exemptions.

I learned recently at a NOL seminar that the only amount you put on line 21 is the amount of the NOL carryfoward that WILL be used during the intervening year. So in your example, none of the carryforward should be listed.

Maribeth

[Kram BergGold]

Pro Series

Gabrielle,
I think I have noticed this same thing about the worksheet in Pro Series but I think when the numbers do go forward to the next year you will actually see the larger amount.
Try a test by creating a 2005 NOL and see what happens when you transfer to 2006.

[Gretel]

Gabrielle,
I think I have noticed this same thing about the worksheet in Pro Series but I think when the numbers do go forward to the next year you will actually see the larger amount.
Try a test by creating a 2005 NOL and see what happens when you transfer to 2006.

Unfortunately this is not the case. Right on top of the worksheet it says: Enter amount to transfer to next year, if not line 25 less line 24.

[rjholmes]

Looks correct

The worksheet figures look correct. The standard deduction (nonbusiness deduction) is used only to the extent of nonbusiness income. Therefore, the entire standard deduction is not used against income - only $681. Your amount used up should be your business income (w-2, SE, etc).

[Maribeth]

This is an intervening year calculation, not the original NOL year. In the intervening years, the carryfoward will offset any income, not just business income. However, in Gabriele's situation, there is no current year income to offset and the full amount of the NOL carryfoward will carryforward to the following year.

Maribeth