Skip a year carrying NOL forward

[Dennis Merritt]

Here's the scenario. In retirement my LLC has negligible income, but I'm involved in a lawsuit. Given these numbers, what's the best way to file my taxes:
2022 - I have a $140,000 loss due to legal fees.

2023 - I have normal personal income from SS and IRA of $50,000

2024 - I settle the lawsuit for $200,000 and add that to my income

Question, can I carry that 2022 NOL loss to my 2024 return? Or do I have to take it in 2023. If I do, then the 80% limit means I can only take $40,000 of the loss in 2023. Can I take the rest in 2024, or defer the whole loss to 2024? Or am I totally screwed having to take the full $200,000 + normal $50,000 as taxable income in 2024. Very confused reading IRS 536.

[Mike9241 · Accepted solution]

you can't skip years. the NOL will have to be carried to 2023 and then any remainder to 2024.  

for 2022 you say you'll have a business loss of $140K but what about any IRA distributions which would reduce any NOL c/f. Social security would likely not be taxable if any was received.

Turbotax does not compute the NOL carryforward. use IRS PUB 536 worksheet 2