NOL carryover from 2017: Do I have to use it in my 2018 declaration even if I would owe no tax without it?

[jojokrikri]

I have a NOL to carry over from 2017.  I relinquished any carryback.  Even without using the loss in my 2018 declaration, I have zero federal tax liability for the 2018 tax year.  Do I have to enter the loss on my 2018 declaration, or can I wait and use it later in a year when I may otherwise have to pay federal tax?

[MichaelL1]

You have to enter the NOL on the 2018 to able to determine how much if any will go to the 2019 return.

If you don't claim it on the 2018 you will have no carry-forward to 2019.

Odds are some of the NOL will be reduced but if large enough then you can still carryover some to 2019.

[jojokrikri]

I tried it, and it absorbs all of it, and yet there's no benefit because the tax was already 0.  Do you happen to have a reference in the tax code or IRS literature that says we have to take it the very next year whether it helps or not?

[MichaelL1]

A Net Operating Loss carryover is a "use it or lose it" deduction up to the taxable income available to absorb the NOL. It does not make any difference whether you owe tax with your return.

An NOL is treated as used in a year to which it can be carried, even if the taxpayer did not take the deduction or benefit from the deduction.  The NOL is deemed absorbed based on the correct taxable income, which reduces the NOL available in later years.

I'll see if I can find a tax cite for this.

[MichaelL1]

 You must make certain modifications to your taxable income to determine how much NOL you will use up in the year and how much  you  can  carry  to  the  next  tax  year.  The you can carry to the next tax year generally is the excess of the amount of your NOL carried to the tax year over your modified taxable  income  for  the  carryback  or  carryforward
year.   page 7 of IRS publication 536   <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/p536.pdf">https://www.irs.gov/pub/irs-pdf/p536.pdf</a>

[jojokrikri]

Thank you for this.  Yes, I saw that page also.  But what I don't see is a directive that clearly says you have to take it in the very next year, and you cannot save it for later years.  If you find something more direct, please let me know.

[MichaelL1]

Will do.

[laurent]

how do you file for a carryover to 2019?

turbotax shows nothing in the worksheets