NOL not carry forward from 2016 to 2017 & 2018

[fbgoldwing]

In 2016 I had a substantial net operating loss when I filed my taxes using TurboTax Home & Business, but it did not carry that loss over to 2017 or 2018.

If I go and enter it back into TurboTax 2017 so it covers 17 and 18, am I correct in assuming that it will modify those tax forms so that I would have to amend the filing of both 17 & 18? Could I instead just input it into 2018 so that it moves forward to 2019, or would it be best to just add it into the 2019 taxes as I file those?

[Anonymous_ · Accepted solution]

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@fbgoldwing wrote:

In 2016 I had a substantial net operating loss when I filed my taxes using TurboTax Home & Business, but it did not carry that loss over to 2017 or 2018.

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The problem you are faced with at this point is for a 2016 net operating loss (NOL), you either must carry the NOL back two years before you can carry it forward (for twenty years) or you had to attach a statement to your original return filed by the due date (including extensions) for the NOL year (2016) to waive the carryback period.

Since you apparently did not attach a statement waiving the carryback period for 2016, you can only amend previous returns (such as 2014 and 2015) to include the 2016 NOL and then carry the NOL forward (assuming it has not been absorbed) on returns thereafter.

See https://www.irs.gov/pub/irs-prior/p536--2016.pdf

Note that for NOLs arising in tax years after 2017, the only option is to carry the NOL forward.

[KurtL1]

NOL amounts that are carried over to the next year are calculated in each year based on the information in that year. You should not skip amending the 2017 return. You need to amend each year in sequence to determine the correct amount that is carried forward to 2019.

[Anonymous_]

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@KurtL1 wrote:

NOL amounts that are carried over to the next year are calculated in each year based on the information in that year.

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Except for NOLs arising in tax years 2017 or earlier, you need to waive the carryback period before you can carry the NOL over to the next tax year.

If you do not waive the carryback period for NOLs arising in tax years 2017 and earlier with your timely filed return, your only option is to carry the NOL back two tax years before carrying it forward.

[fbgoldwing]

Will I need to amend 2016 filing also? Details follow. And THANKS for the assist.

2016 Was the first year I began using TT so the mistake is probably mine assuming that TT would progress the NOL from year to year. I did execute a 172 to Forego the Carryback as there was nothing for it to be applied to.

The NOL originated in 2006 and has been applied to all years up to 2016 where it appears that it was only applied to the Adjusted Gross Income and then went AOL.

The loss was entered as a NOL on line 21 of the 1040 and line 14a NOL of the Federal Carryover Worksheet under 2015.

Then it was combined to the loss for 2016 and placed on the 1040 lines 22, 37,38 and line 5 Adjusted Gross Income of the Federal Carryover Worksheet under 2016 instead of line 14a NOL.

It was then combined with the deductions on line 40, then placed the sum on line 41and reflected on line 1 of the Capitol Loss Carryforward worksheet.

In 2017 I can find no reference to the loss with the exception of the Tax History Report under Total Income and Adjusted Gross Income.

[Anonymous_]

Since you filed the requisite statement waiving the carryback period, you need to carry the NOL forward to your 2017 return (amending would be needed, I presume) and then to 2018 (if not absorbed in the 2017 tax year).

Obviously, you need to calculate your NOL manually since TurboTax does not support that function and does not carry an NOL forward, for that matter. Subsequently, you can simply enter the NOL in the Less Common Business Situations section of TurboTax.