Single member LLC is now an S-Corp. The LLC has a carry forward from 2022. It is now an S-Corp as of 2023. Can the 20022 carry forward still be taken?

[booksbyjustine]

My business was a single member LLC, filing Schedule C, for 2020 - 2022 years. 

After a timely filing of Form 2553, it is now taxed as an S-Corp, as of 01/01/2023.

2022 year had a NOL and not all of it was allowed. 

The S-Corp also had a NOL in 2023, which is on the K-1.

Can the 2022 carry forward still be taken in 2023 now that the same business is an S-Corp? 

Other factors: I have Schedule E rental income profit the 2022 carry forward can offset.

I am using 2023 TurboTax Home & Business desktop.

Thanks in advance.

[ThomasM125]

You can't use the net operating loss carryover any year the company files as an S Corporation. You can carry forward the passive losses against passive income of the S corporation.

[booksbyjustine]

Thanks for your reply. I understand the S-Corp can not carry forward a loss.

Is this still the case though when the loss I am wanting to carry forward is from 2022 when the business was still  filing as a single member LLC, on Schedule C?  If not, then that carry forward just goes away and can no longer be used.

The S-Corp status did not begin until 01/01/2023

Thanks, this clarification will help immensely.

[RobertB4444]

No.  It's gone unless you can use the NOL as a carryback to a prior years' return. 

@booksbyjustine