Can I elect to utilize only a portion of my NOL carryover from prior years even though turbotax is utilizing the entire amount?

[rsmeyerson]

I have a $5,000 NOL carryover and turbotax is utilizing the entire amount.  The return shows I owe $0.  If I change the NOL amount to $1,500, the return still shows I owe $0.  Can I elect to utilize only $1,500 and carry the remaining $3,500 forward?  If so, how can I do this?  Also, why is turbotax utilizing the entire $5,000 when there is no benefit to do so?

[ToddL]

A Net Operating Loss carryover is a "use it or lose it" deduction up to the taxable income available to absorb the NOL. It does not make any difference whether you owe tax with your return.

An NOL is treated as used in a year to which it can be carried, even if the taxpayer did not take the deduction or benefit from the deduction.  The NOL is deemed absorbed based on the correct taxable income, which reduces the NOL available in later years. 

[jackie rummel]

Hi Todd

Would you please let me know where the IRS states this?  I can only find that you can not carry back but can carry forward indefinitely.   I thought somewhere I read in min. amounts of $2,000 or $3,000.  Thank you really appreciate the clarification.

[VictoriaD75]

It depends on when the NOL was generated. The use of an NOL generated after December 31, 2017 is limited to 80% of the current year's taxable income (without regard to the NOL deduction) when used. NOLs generated prior to January 1, 2018 continue to be used 100%, necessitating tracking of different NOL periods.

There is no carryback provision, but the carryforward period is no indefinite. However, the previous 2 year carryback and 20 year forward rules continue to apply to NOLs generated prior to January 1, 2018. The NOL is used to offset future income.

Net Operating Losses

[stevefcbpaws]

Hi, I have NOL's before and after December 31, 2017.  In terms of the application of the rules for 80% or 100%, Can I elect which period NOL's to apply?

[Jim48]

I have TT Deluxe 2019 and I understand that it will not calculate NOLs.    I had an AGI of -$62,000 with the loss from a K-1 LLC.  I took the standard of $27,000.   Without pulling my hair out trying to figure out f1045, can I use $35,000 as my NOL.  I attached a letter to last years return stating that I waived the carry back.  I have little income other that Social Security and would like to determine what portion of an IRA I can withdraw not to lose this years deduction.  I bought TT 2020 but it is basically non functional at this point (Dec 2020)

[Anonymous]

we can't see your 2019 return.  your NOL calculation is probably wrong. you need to use schedule A of 1045 to properly calculate the amount or publ 536 which has a worksheet.https://www.irs.gov/pub/irs-pdf/p536.pdf 

calculate it wrong and then the IRA withdrawal amount you are trying to hit will be wrong. when filing the IRS will probably catch the error and then 

the PUBL has a nice list of items that make up the various categories

here's a shortcut that  may work (no guarantee)

the excess of items business losses over items of business income - these items usually are wages, schedule C, E & F net income or loss) capital and ordinary gains and losses from disposing of business property 

this net is reduced by the excess of nonbusiness income over nonbusiness expenses (but not below 0)

nonbusiness income - dividends, interest, nonbusiness capital gains 

nonbusiness expenses  - itemized or standard deduction, nonbusiness capital losses (not to exceed nonbusiness capital gains) 

example:

wages $39K - business income

interest income $3 - nonbusiness income

k-1 loss deduction $104K loss - business loss

agi negative $62K

std deduction $27K non-business

excess of items of business losses over business income 

$104K less $39K = $65K

excess of nonbusiness income over nonbusiness deductions

$3k less $27K net negative $24K thus limited to $0

net $65 loss = NOL

if interest income was $40 and the other items remained the same

agi would be negative $25K

excess of items of business losses over business income stays $65K

excess of nonbusiness income over nonbusiness deductions

$40K less $27K net $13K

NOL the net of the above $52K

[Jim48]

Thanks for your response.

Got Pub 536 but struck on line 1: NOL = AGI - deductions.  -$62,000 - $27,000 = -$87,000   ?? can't be right

Instructions said nothing about handling a negative AGI.  Called IRS this am but after 45 minutes was told that that there was no one who could help with Pub 536.

Downloaded f1045.  What a *^%$!  However it starts out the same way on Sched A Line 1 as Pub 536 with the formula to determine NOL.

[JamesD5]

Hello, I had a sizeable NOL that I claimed in 2018 and carried it forward to 2019.  Then I amended that return in 2020 for about $3k and somehow the NOL ended up backwards so it wasn't actually used on the amended return and i paid about $4k in fed tax based on the amended return.  I've carried it forward for 20, 21 and 22 albeit the number has gotten a bit skewed. 

Do i need to amend 20, 21 and 22 or can i just correct the amount in 23?