Active trader, declared 475(f) MTM selection in 2022, filed form 3115 for tax year 2022

[FutureDragon]

For last tax year (2022), I used the CD/download version of TurboTax per recommendations from the community.

Questions:

1. For this tax year (2023), should I continue to use the CD/Download version of TurboTax? 
2. If I should continue to use the CD/download version of TurboTax, can I get discount for the CD/download version of TurboTax, as MetLife program only provides free access to the online version?

Based on my research so far, I need to

• File schedule A on form 1045 to figure out net operating loss (NOL) of tax year 2022 to carryforward to tax year 2023., Alternatively, use pub 536 worksheet 1 to calculate the NOL to carryforward   NOL (intuit.com)
• Report year 2023 trading gains and losses on Part II of Form 4797, Sales of Business Property.

Questions:

1. Do I need to download form 1045 and do the calculation of NOL myself, or can Turbo tax do the calculation of NOL? Please send detailed instructions if possible.
2.  On form 8995 of tax year 2022, there is a net loss (pass-through entities losses?), can I also carryforward this loss to tax year 2023? If so, please provide instructions.
3. Can I e-file? If I can e-file, do I need to mail a printed copy of the return along with form 1045 to the IRS? Any additional filing instructions that I need to follow?

[KrisD15]

You will need to continue with TurboTax Desktop in order to claim any deductions, such as a Home Office Deduction.

You will not file Form 1045 as that would be for a Net Operating Loss Carryback.

The TurboTax program will carry the loss forward, and it can also be entered into the program manually.

A return cannot be e-filed with Form 1045, but again, you won't be needing it. 

In TurboTax, since you made the Mark to Market election, first establish your Schedule C if needed, and enter your expenses, including Home Office if applicable.

The Home Office Deduction will at first be disallowed. 

Enter the details of the trades with adjustments.

1. Open or continue your return in TurboTax.
2. Under the Business tab section scroll down to “Less Common Business Situations” and select Start or Update next to “Sale of Business Property”.
3. On the “Any Other Property Sales?” screen, select Sales of business or rental property that you haven’t already reported and select Continue.
4. On the “Sales of Business or Rental Property” screen, select Yes or No to question “Do all of the following apply to the property you sold?”

On the page “Tell Us About Your Sale”, select the Type of sale. (To report on Form 4797 in Section II, select Held one year or less.) Then select Continue.

Once the trades are entered, switch to FORMS MODE

Form 4797 Line 18b is the gain, use this amount and enter it on Form 8829 Part II Line 8 Calculation Worksheet line 2C.

This will allow the Home Office Deduction to be recognized. 

You may also check to see if the NOL was carried over in Forms Mode or under

Business Income and Expenses

Less Common Business Situations

Net Operating Loss/QBI Carryforward Loss

There does not seem to be a discount available for the Desktop software through this program.

[FutureDragon]

I was able to get a discount for the Desktop version (Turbo Tax Premium desktop version) through the Fidelity program.

However, on the 2022 Net Operating Loss page, the Net Operating Loss Carryover field shows as empty.

Questions:

• Should I upgrade to Home & Business version, as the software presented the option?
• Why is the Net Operating Loss Carryover field empty, and how should I proceed from here to figure out the right amount of NOL carryover? 

[DawnC]

No need to upgrade, TurboTax does not support the Net Operating Loss calculation.  Net Operating Loss: If after completing your tax return you have a negative amount on Form 1040, line 15, and you had a loss from a business activity such as those reported on Schedules C, E, F, or resulting from dispositions on Form 4797, or sustained a casualty loss, you may have a Net Operating Loss (NOL).  

The program does not calculate the amount of NOL to be carried back or forward to another year. To determine your NOL, if any, refer to Form 1045, Schedule A (not included with this program). You will probably also benefit by reviewing IRS Publication 536 for details about the NOL calculation. 

Situations that TurboTax does not cover       @FutureDragon 

[FutureDragon]

Thanks @DawnC  for the quick reply. 2 more questions:

• Do I need to file Form 1045 by mail?
• If yes for the above question, can I still e-file the main return via Turbox Tax and mail a copy of 1040 along with form 1045?

Thanks,

[PatriciaV]

Yes, you will need to mail Form 1045 to the IRS. Lookup the address for your state here: Where to File Addresses for Tax Returns by State. See these instructions for what to attach when you mail: IRS Form 1045 What to Include.

And, yes, you should e-file your tax return.