Net Operating Loss for Partnership LLC

[hero2]

My partnership LLC incurred a loss in CY2021 and CY2022.  I was not aware that this loss could be deducted in CY2023.  Should I do an amended 1040X or should I claim losses in CY2024.  Schedule 1 to claim this loss does not have columns for prior years to reflect these losses.  How do I show this in Turbotax?

[DavidD66]

If your LLC taxed as a partnership had losses in 2021 and 2022, then you should have received a Form K-1 for each year that showed the loss.  Unless it was a passive loss, each year that loss would have offset other income reported on your tax return or created a Net Operating Loss.  If it created an NOL you should have prepared an NOL Worksheet to show to include with your tax return to show the amount you were carrying forward.  

If you are referring to an NOL for 2021 and 202, you will need to file amended returns for 2021, 2022, and 2023 to show your NOL Carry Forward each year and to deduct the usable NOL on the 2023 return.

[hero2]

I did receive K1s for CY2021, 2022, and 2023 but was unaware that I had to do a NOL worksheet for those years.  I did not claim the losses for CY2021 and Cy2022 in CY2023 since I had no taxable income or tax dthat year.  Can I claim these losses in CY2024?  Is this shown in Schedule 1?  Turbotax supporting document shows columns only for CY2023.  Do I include NOL for 2021 and 2022 in this column?

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Thank you

[ThomasM125]

You would first deduct the loss in the year it occurred to the extent allowable, then any unused loss would be carried over to the next year. You can't just pick and choose what year to apply the loss to. You should use Form 172 to calculate your net operating loss (NOL) and file it with your tax return in the year of the loss and for each year you can claim the deduction.

Another thing to keep in mind is that you can't deduct a loss from the partnership to the extent you don't have basis in the company. In other words, you can't deduct more that what your net investment is in the partnership, so your net operating loss would not include non-deductible losses from the partnership.