topic Re: NOL Carryback in Get your taxes done using TurboTax

NOL Carryback

8256931 — Thu, 28 Oct 2021 00:13:51 GMT

I have a 2019 NOL that I'd like to carryback, per the CARES Act. I didn't file the 1045 within the correct time frame, so I believe I should file a 1040X in order to request the carryback. Can someone provide more details on how that is done? Specifically, would I then complete a 1040X for 2019 and each of the five years preceding (2014-2018)? In this case, is the 3-year time allotment to file an amended return waived?

Re: NOL Carryback

Mike9241 — Thu, 28 Oct 2021 00:37:05 GMT

you would need to create a 1040-X for 2014, then a 1040-X for 2015 and so on. how to do this in Turbotax is the question. in theory, neither Turbotax nor the IRS may no longer retain a copy of the 2014 return. don't know what Turbotax is going to permit. for example, 2014 is no longer supported by TT so how does one amend it.

contact Turbotax support. threads concerning amending 2014 are old.

5am-5pm Pacific Time (8-8 Eastern) Monday - Friday
https://support.turbotax.intuit.com/contact

800-446-8848

Re: NOL Carryback

8256931 — Mon, 01 Nov 2021 20:18:19 GMT

Thanks for your answer. I don't mind completing the 1040X forms by hand. Just for clarity, I cannot choose which years (of the previous 5) to apply the NOL, correct? For a 2019 NOL carryback, I need to complete a 1040X for year 2014, then 2015, etc. until/unless the NOL is used up. Is that correct? I can't start with 2017 as my largest earnings year, right? And, would I complete a 1040X for 2019 as well to indicate that the NOL was carried back? As a last question, I am under the impression that a taxpayer has only 3 years to file an amended tax return. Did the CARES Act waive that time limit for this scenario? Thanks so much!

Re: NOL Carryback

Mike9241 — Tue, 02 Nov 2021 00:56:20 GMT

Just for clarity, I cannot choose which years (of the previous 5) to apply the NOL, correct? For a 2019 NOL carryback, I need to complete a 1040X for year 2014, then 2015, etc. until/unless the NOL is used up.

correct

And, would I complete a 1040X for 2019 as well to indicate that the NOL was carried back?

As a last question, I am under the impression that a taxpayer has only 3 years to file an amended tax return. Did the CARES Act waive that time limit for this scenario? Thanks so much!

IRC section 172(b)(1) NOL carryback rule

(D)Special rule for losses arising in 2018, 2019, and 2020
(i)In general
In the case of any net operating loss arising in a taxable year beginning after December 31, 2017, and before January 1, 2021—
(I)such loss shall be a net operating loss carryback to each of the 5 taxable years preceding the taxable year of such loss, and
(II)subparagraphs (B) and (C)(i) shall not apply. (the old carryback rule)

Re: NOL Carryback

8256931 — Fri, 17 Dec 2021 01:23:51 GMT

One more follow up -

I already had net losses for the tax years 2014 and 2015. Do I still need to create the 1040X for those years? So, my net loss carryback from 2019 would show $0 used in 2014 (no net changes on the 1040X), $0 used in 2015, and then some used for 2016 to 2018 until it is used up? Also, to confirm the timeline, I would have the 3 years from the due date of the 2019 tax return to file these 1040X documents, right?

If I'm manually completing the form 1040X's, I enter the appropriate tax year at the top and check the box on line 1 (which, presumably, allows me to modify a tax year after the 3 year window has expired), correct? Is there anything to say the changes are due to a 2019 loss carryback (as opposed to 2018 or 2020)?

Re: NOL Carryback

Mike9241 — Fri, 17 Dec 2021 05:08:46 GMT

One more follow up -

since 2014 and 2015 are NOL years I would not file form 1040-X for either year (no refund/ no tax due)

If you choose to file an amended return to claim a refund based on a net operating loss, you must file an amended return for the tax year to which you are carrying back a net operating loss. Write or type “Carryback Claim” at the top of page 1 of Form 1040-X.

Attach a computation of your NOL using Schedule A (Form 1045) and a computation of any NOL carryover using Schedule B (Form 1045). Generally, interest won’t be paid on any NOL refund shown on
an amended return processed within 45 days of receipt. For details, see Pub. 536, Net Operating Losses (NOLs)

use the schedules from the 2019 form 1045

https://www.irs.gov/pub/irs-prior/f1045--2019.pdf

schedule A and B of form 1045 can handle 3 years therefore on the 1045 schedule B for the 2016 return show that 2014 and 2015 were NOL years.

for the 2017 year you also include a copy of 1045 schedule B for 2016.

to confirm the timeline, I would have the 3 years from the due date of the 2019 tax return to file these 1040X documents, right?

not exactly!

Generally, for a credit or refund, you must file Form 1040-X within 3 years (including extensions) after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later. If you filed your original return early (for example, March 1 for a calendar year return), your return is considered filed on the due date (generally April 15). However, if you had an extension to file but you filed earlier and we received it on July 1, your return is considered filed on July 1.

the line 1 check box merely tells the IRS that there is an NOL c/b

see the instructions provided above

for more info

https://www.irs.gov/pub/irs-pdf/i1040x.pdf

Re: NOL Carryback

fanfare — Fri, 17 Dec 2021 14:01:47 GMT

You have to read IRS Pub 536, several times, to understand what you can and cannot do.

Due to the complexity, you may want to abandon the entire endeavor.

Re: NOL Carryback

WineBusinessManager — Sun, 17 Apr 2022 21:23:50 GMT

I'm in this same boat (overwhelmed by complexity). I too missed the 1045 date.

Situation: I have Casualty Loss from qualified disaster California Wildfire in 2020. Home burned, total loss. Using Safe Harbor Insurance Method. I thought I could amend 2020 return (i.e., file 1040X to establish the NOL), then amend 2015 to apply the carryback, then amend 2016 to apply the rest of it. Anyone can help with the logistics here?

Specific questions:

1. Law at the time (CARES Act) allowed carryback five years from 2020; shouldn't that be governing rule, today, via the amendment today of 2020?

2. I've got 2020 1040X done; I see the increased itemized deductions for the Casualty loss, but

(a) Turbo Tax is showing it as "Misc Deds" not Casualty Loss, can I fix that?

(b) Where/how does 1040X for 2020 show that the excess of itemized over AGI generated a "NOL" and "carryback"?

3. Do I manually calculate the NOL carryback? How?

4. Then manually enter the total onto 2015? What Form/line? Ditto for 2016...

Then print/mail it all together??

Help?

Re: NOL Carryback

fanfare — Sun, 17 Apr 2022 21:37:32 GMT

Your question No.1 is answered above in end of Mikes comment timestamped

‎11-01-2021 8:56 PM

Re: NOL Carryback

fanfare — Sun, 17 Apr 2022 21:44:38 GMT

Instead of carrying back, you can carry forward.

That may be simpler.

"If you waive the carryback period or do not use up all of the farming loss in the carryback
period, you will have an NOL that can be carried forward indefinitely until used up. "

Re: NOL Carryback

fanfare — Sun, 17 Apr 2022 21:58:58 GMT

@WineBusinessManager

all your other questions go in your 1040-X Part III explanation statement, which will probably require an additional sheet.

You can't finalize 2020 1040-X until you know the carryback used up in all the prior tax returns.