My business is set up as a C Corp. In 2014 the business incurred a net operating loss (NOL) of - $8,000. For some reason, the Turbo Tax for Business program I used to prepare the 2014 corporate return did not create a NOL carryover worksheet. Consequently, small net incomes that the business made in 2015, 2016, and 2017 were not reduced with the 2014 NOL carryover to those years. I just finished my Corp. tax return (using TurboTax for business 2018) and the business has taxable net income of $3,614. Turbo Tax figured my business owes the IRS about $700 for the 2018 tax year. Has the new tax law done away with or significantly shortened the NOL carryover (carry forward) ? Can I use the -$8,000 NOL from 2014 to offset the taxable income in 2018? Please advise and let me know how to go back and fix this with the NOL carryover worksheet in 2014. Thank you, [pii removed]
There have been changes, but it doesn't sound like those changes will affect you. You would have had to carryback the 8K two years and then forward (up to 20) unless you made an election on your 2014 return.
For tax years beginning before January 1, 2018, NOLs were able to offset 100% of taxable income. They were allowed to be carried back two years and carried forward for twenty years.
Under the new law, an NOL can offset only 80% of taxable income in any given tax year. Furthermore, NOLs can no longer be carried back, they must be carried forward. The 20-year carryforward period has been replaced with an indefinite carryforward period. Your NOL still uses the old rules as the new rules are for tax years beginning after 12/31/2017.
Instructions for Form 1139 - Please see these instructions and see below. You would have had to make the election within 6 months from the due date of the return with the NOL.
If the corporation timely filed its return for the loss year without making the election, it can make the election on an amended return filed within 6 months of the due date of the loss year return (excluding extensions). Attach the election to the amended return and write "Filed pursuant to section 301.9100-2" on the election statement.
There have been changes, but it doesn't sound like those changes will affect you. You would have had to carryback the 8K two years and then forward (up to 20) unless you made an election on your 2014 return.
For tax years beginning before January 1, 2018, NOLs were able to offset 100% of taxable income. They were allowed to be carried back two years and carried forward for twenty years.
Under the new law, an NOL can offset only 80% of taxable income in any given tax year. Furthermore, NOLs can no longer be carried back, they must be carried forward. The 20-year carryforward period has been replaced with an indefinite carryforward period. Your NOL still uses the old rules as the new rules are for tax years beginning after 12/31/2017.
Instructions for Form 1139 - Please see these instructions and see below. You would have had to make the election within 6 months from the due date of the return with the NOL.
If the corporation timely filed its return for the loss year without making the election, it can make the election on an amended return filed within 6 months of the due date of the loss year return (excluding extensions). Attach the election to the amended return and write "Filed pursuant to section 301.9100-2" on the election statement.