What is the correct way to input NOL from last year?

asanyal · ‎March 14, 2020

What is the correct way to input NOL from last year for the following situation? -

2018 K1 / 1120S loss = $200K
2019 K1 / 1120S income = $50K

Schedule 1 is showing Part 1 Additional Income Line 5 S Corp = negative $150K

Schedule E, p2 is showing the following -
- Part II Line 28 A (k) Nonpassive Income $50K
- Part II Line 28 B (i) PYA (prior year) Loss K1 $200K
- Line 32 Total S Corp loss = $150K
- Form 1040 Line 7a = negative $150K

Can this be right way to report the prior year carryover NOL?

tagteam · ‎March 15, 2020

@asanyal

You need to provide additional details concerning your K-1s because what you posted for the years thereof is confusing.

Particularly, you mentioned a 2018 K-1 with a loss and a 2019 K-1 with income with both, apparently, originating from an S corporation (1120-S) and then later indicated some sort of combination of the two figures.

Note that the 2018 K-1 should have been entered into your 2018 individual income tax return; it appears as if you are now combining that K-1 with the 2019 K-1 which, of course, is not the correct procedure.

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asanyal · ‎March 15, 2020

2018 K1 / 1120S loss was $200K
2019 K1 / 1120S income is $50K

2018 K1 Loss was reported in individual 1040 in 2018 to result in negative AGI of -$200K.

Where do I input the AGI of -$200K to carry over from 2018 to 2019 in TT Home & Biz?

Thank you.

tagteam · ‎March 15, 2020

Click the Business tab and scroll down to the Less Common Business Situations section. Click the Start or Update button to the right of Net Operating Loss/QBI Carryforward Loss.

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tagteam · ‎March 15, 2020

Also, note that for losses arising in taxable years beginning after Dec. 31, 2017, the net operating loss deduction is limited to 80% of taxable income (determined without regard to the deduction).

See https://www.irs.gov/publications/p536

asanyal · ‎March 15, 2020

I appreciate your response. Would the following procedure be correct? -

Input 2019 S Corp income of $150k from K1 into Schedule 1 Line 5
Input 2018 AGI Loss carryover of $200k in Schedule 1 Line 8 as NOL/QBI Carryforward Loss (from Less Common Business Situations in TT Step by Step)

Thank you.

tagteam · ‎March 15, 2020

Yes, but please recall that your NOL deduction is limited to 80% of taxable income before the deduction.

What is the correct way to input NOL from last year?

Business & farm

Business & farm

Business & farm

Business & farm

Business & farm

Business & farm