Yes, if the current year Schedule K-1 creates a Net Operating Loss (NOL) that you may carry back to prior tax returns, include the information from that K-1 on your current year tax return.
You may only carry back NOL if you have income in prior years to offset the loss. Any unused NOL is carried forward after the current year.
Example:
- Current Year NOL = <$25,000>
- 2015 income = $2,000; 2014 income = $10,000
- Carry back $12,000 of NOL on amended returns ($2,000 to 2015 & $10,000 to 2014) leaving net income = 0 for both years.
- Balance of NOL = $25,000 - $12,000 = $13,000.
- Carry forward $13,000 to next year's return.
Losses in the last two years would have been carried forward to increase the current year NOL. In this case, there is no carryback. The entire NOL is carried forward.
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