How to carryover mark-to-market loss from schedule K to future years as an investor

[Mike9241 · Accepted solution]

Turbotax does not do the form. so it's a DIY project. make sure to read the instructs for the lines.

most likely line 24 on the form 172 (which must be negative to have an NOL) will be the same as line 11 on the 1040

the Instructions for the 172 don't say anything about including it with your return. However, you should because of the Paperwork Reduction Act Notice. "You are not required to obtain the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number."

the form does have a valid OMB control number (top right)

there is no way to scan or copy this form so you can e-file your 1040. thus you'll have to mail in your return. this should be the kast page in the return since there is no attachment sequence. 

yes you can enter the NOL in the 2024 column in the carryover worksheet line 14a. Enter as a positive number

[dc20222023]

@Mike9241 If my other personal income is more than the schedule k loss (I have a taxable income), do i still need to file form 172 for each business that has a loss? Thank you!

[Mike9241]

no if you have taxable income then line 24 of form 172 is going to be more than zero and thus you don't have an NOL.

form 172 is to compute the NOL, if any, for that tax year for form 1040. it is not for computing an NOL for separate activities.   

however, if the k-1 has a loss, then there might be a limitation on the deductible loss under IRC 461 (info line AJ in box 20 of k-1). this might require completion of FORM 461 which Turbotax doesn't do.

see the instructions to see if its needed

https://www.irs.gov/pub/irs-pdf/f461.pdf form

https://www.irs.gov/pub/irs-pdf/i461.pdf instructions