Situation: I have a client that ran a trucking business for a number of years and in 2022 exited the business due to the economy. Once calculated, he has a $19k NOL Carryforward. During the time of trucking, he was single. In 2023 he got married and now will be filing jointly. In 2023 he worked only W-2 jobs.
According to 536, he can only claim 80% of the excess of taxable income computed without regards to the NOL. What does the publication mean by "excess"? I also understand that this computation can only be done on his income. not joint.
I just need help with this computation. Also, what is appropriate to attach as a statement that shows the facts of this NOL?
Thank you so very much, in advance, for anyone's help.
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It's the amount that exceeds taxable income after having been zeroed out. There's a good explanation and graphic at the site below.
See https://www.ksmcpa.com/insights/80-nol-limitation-the-new-paradigm
Note that TurboTax isn't licensed for commercial use (i.e., instances where you prepare returns for clients).
@tagteam Yes, I understand. I do use ProSeries but I am trying to guide my client on how to do it on their own without stepping out of bounds with my tax preparer obligations. I need to understand the mechanics behind it myself before I go and try to explain it to anyone else.
Thank you for your help.
I had no clue. Thank you!
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