Negative AGI on 2017 & 2018 tax returns...can I carry forward that loss to 2019 where I had a positive AGI?

[tonybeo]

I started in real estate in 2017 and had negative AGI's in 2017 (neg $5696) & 2018 (neg $5259).  Positive AGI in 2019 ($4170).  On 2018 return, the NOL from 2017 (neg $5696) was entered onto line 8 of sch 1 "other income" as a NOL.  But on my 2019 return, the neg AGI from 2018 (neg $5259) was not entered on line 8 of sch 1.  I am wondering if that can be done now with an amendment to the 2019 return?

The same thing happened on the 2020 return, I had no entry on line 8 of sch 1 but if the 2019 return can be amended as described above, then I would need to carryforward the NOL from that return into the 2020 return via an amendment as well.   Then I would carryforward the loss from the 2020 return on the 2021 return which has not yet been done.

Thanks in advance for any help with this issue.

[RobertB4444]

You are exactly correct on how to carry the NOL forward IF you elected to carry it forward. 

The IRS expects you to carry an NOL backwards to a prior year and use it to get immediate relief from tax issues.  If you want to carry the NOL forward into the next year you have to elect to do so by the due date of the return.  If you did not file this election then you will have to carry the NOL backwards.

So if you filed the elections with your return then you are exactly right with your plan.  Amend 2019 and 2020 and put the NOLs in that you forgot to use and you're all set.

If you did not elect to carry your NOL forward then you will need to amend your 2018 return and add the 2019 NOL to it and then you will need to amend your 2019 return and add your 2020 NOL to it.  If this is the case you also need to do the 2018 return quickly - it must be filed within three years of the original due date of the return which was April 17 of 2019. 

Although if your 2018 and 2019 returns already had an NOL there may not be much point to reducing your income even further.

[tonybeo]

Thanks Robert.  My 2017 & 2018 returns both had a NOL but my 2019 return didn't.  I did not elect to carry the NOL forward on the 2018 return and the 2019 return didn't have a NOL.  So does that mean I would have to amend the 2017 return to carry back the NOL?  Note that I didn't start in real estate until 2017 and the 2017 NOL was carried forward to 2018.

Or would I just amend the 2019 return to carryforward the 2018 loss and amend the 2020 return to carryforward the 2019 NOL?  Can that be done or have I completely lost the ability to carryforward the NOL that is on the 2018 return?

Thanks so much for the help.

[ZoltanB45]

If you did not elect to carry forward the Net Operating Loss in 2018 and 2019,  it may have been used in that year.  Perhaps you declared that it was not a passive activity, so it offset other regular income? If you are using the same tax program, the passive losses which did not get taken that year, would have been carried over.

[tonybeo]

Thanks Zoltanb,

I did not declare it as not a passive activity.  I was not the same tax program so the passive losses from 2018 did not automatically get carried over to 2019.  

[RobertB4444 · Accepted solution]

@tonybeo The election to carry your losses forward instead of back must be made by the due date of the return.  If you did not elect to carry it forward when you filed your 2018 return then you have to carry it back and amend your 2017 return to include the loss.  If 2017 already had a NOL then adding your 2018 NOL to it will almost certainly do nothing but create a bigger NOL.  And if that is the case then I'm afraid that the loss generated in 2018 is gone for good.