My client has a huge NOL which is carried forward since some years. Each year he itemizes, which helps in using up not as much of the NOL as if he would take the standard deduction. In 2007he received a property tax refund. I believe this is taxable to him even though he didn't receive a tax benefit from the deduction last year. But he will receive a benefit in the future due to being able to use the NOL longer. Am I thinking right?
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I Say you are right
I would say *Yes* you are thinking right. It would be no different than if he received a state refund after claiming state taxes paid on itemized deductions.
by claiming it back as income it will *eat up* some of the NOL that would have been originally eaten had he claimed the standard deduction instead of itemizing."And So It Begins!!!"
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