I have unused Net Operating Loss (NOL) Carryforward that I want to use in tax year 2018. I have no NOL for 2018, but I do want to use my NOL Carryforward from 2011, 2012, and 2013. Under the new tax rules, what has changed?
Here is what I think the answer is. I am looking for confirmation that I am correct:
1. The mechanics of using these NOL Carryforwards is unchanged. Simply report the NOL Carryforward as a negative "Other Income" on Line 21 of Schedule 1. Once that entry is made on Line 21, simply compute Adjusted Gross Income (AGI), Taxable income, and the Tax according to the new 2018 IRS Form 1040.
2. The computation of the amount of Carryforward to 2019 is also unchanged. However, note that, starting in tax year 2018, there is no longer any deduction for exemptions. Therefore, starting in tax year 2018, none of the Carryforward is "used up" by claiming exemptions. Note that the Standard Deduction did not "use up" the Carryforward prior to 2018, and it still does not "use up" the Carryforward in 2018. The amount of Carryforward "used up" is equal to a calculated Modified AGI. In 2017, this modified AGI did not allow for such income deductions as Capital Losses in excess of Capital Gains and IRA Deductions. All of those modifications in tax year 2018 are the same as for tax year 2017, again remembering that exemption deductions starting in 2018 are zero.
So, am I correct?
Thank you so much for your help!
first, for 2017 you have to determine if you have an NOL by completing schedule A of form 1045, having a loss on Schedule C does not mean you have an NOL. assuming you do, then, if you timely filed your 2017 return you needed to elect to carry forward the NOL. if you didn't timely file it or failed to make the election, the NOL had to be carried back to 2015 and then any remaining to 2016 and any remaining from 2016 to 2018. note that it's too late to file an NOL carryback claim for 2015 -16 . they had to be filed within three years of their due date or if extended their extended due date (2015 if extended by 10/15/2019 and 2016 if extended by 10/15/2020. you must treat the 2017 NOL as if it has been carried back even though you can't get a refund for those years. any remaining NOL can be claimed for 2018.