topic Help calculating NOL in Deductions & credits

Help calculating NOL

schloske — Thu, 06 May 2021 13:25:41 GMT

I have a significant loss from my partnership this year (K-1 loss). I am attempting to calculate my net operating loss, but the directions from the IRS are somewhat confusing. Can someone please help walk me through it?

Re: Help calculating NOL

Anonymous_ — Thu, 06 May 2021 13:53:26 GMT

Are you using the IRS worksheet?

See https://www.irs.gov/publications/p536#en_US_2020_publink1000177330

Re: Help calculating NOL

schloske — Thu, 06 May 2021 14:12:40 GMT

Yes, but it isn't very straightforward. I basically only have numbers for lines 1-9. Here are some random numbers to see if I am thinking correctly.

Let's say my AIG is $2,800. Line 1 is AIG minus standard deduction. So $2800 minus $24,800 so -$22,000. Is that correct thinking?

I have nothing for lines 2-5. Then line 6 is non-business deductions. Am I supposed to input the standard deduction value here too? That's what it seems by the worksheet.

Then line 7 is nonbusiness income. Let's say $12,800 for that. Line 8 is lines 5+7 so it is also $12,800.

Line 9 is the difference between lines 6 and 8 so that is $12,000.

Nothing for lines 10-23.

Line 24 combines line 1, 9,17, 21-23 for total NOL. Line 1 (-$22,000) plus line 9 ($12,000) equals $10,000 for my NOL. Is that correct? It isn't very clear, and that number doesn't really make much logical sense. Any input would be great.

Re: Help calculating NOL

Anonymous_ — Thu, 06 May 2021 14:52:27 GMT

Re Lines 6 and 7, if you scroll down a bit you will find more specific instructions.

You will factor in the standard (or itemized) deduction more than once.

Re: Help calculating NOL

Mike9241 — Thu, 06 May 2021 20:34:03 GMT

Line 6—Nonbusiness
Deductions
Enter as a positive number deductions
that aren't connected with a trade or
business. They include:
• IRA deductions;
• Health savings account deduction;
• Archer MSA deduction;
• Deductions for payments on behalf of
a self-employed individual to a SEP,
SIMPLE, or qualified plan;
• Alimony paid;
• Most itemized deductions (except for
casualty and theft losses resulting from
a federally declared disaster and state
income tax on trade or business
income); and
• Standard deduction

$10K would seem correct.

another way to compute the NOL

the excess of business losses over business income (with nonbusiness income $12,800 and AGI $2,800 it would seem this number is $10,000

reduced by the excess, if any, of nonbusiness income over nonbusiness deductions. since nonbusiness income is $12,800 and nonbusiness deductions are $24,800, there is no reduction.

so your NOL is $10K