NOL Carryforward to 2022

Forum|Forum|4 years ago
April 13, 2022
3 replies
17 views

Can anyone explain the post-2017 NOL limited to 80% of taxable income before any NOL deduction? Taxable income is negative before. If I show it all carry forward to 2022, then taxable income is positive. Do I limit it to 80% of that number? Do I limit it to 80% of the negative taxable income to carry forward? I have called Lacerte and the IRS. Can someone please help?

Lacerte Tax

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C

cpaJA8Author

Level 3

Anyone?

S

strongsilence

Level 10

Is 2021 an NOL?

It would be helpful if you listed the NOL amount and the year it originated.

It sounds to me that you are considering whether to carry a 2021 NOL forward or back. Is that right?

S

strongsilence

Level 10

A side issue:

I had 2 of these situations prior to 4/15 and I expected to see the diagnostic still in my list when I opened the tax return. But the diagnostic is not there. So I wonder if Lacerte has solved the issue.

C

cpaJA8Author

Level 3

NOL Worksheet 1: Comp of 2021 NOL line 24=<873>

Comp of Nonbusiness income 14,190. Nonbusiness Deducts 14,250.

Comp of 2021 Taxable income for NOL utilization: Taxable income <4043>+NOL from 2019 and later=3,110. 2021 taxable income before NOL deduct=<933>.

Schedule 1 line 8A 2019 NOL utilization: Initial loss and NOL carryover avail in 2021=1507. Taxable income before NOL deduct <933>. NOL absorbed=0. Taxable income after NOL deduct=0. NOL carryover to 2022=1507.

Schedule 1 line 8A 2019 NOL utilization: Initial loss and NOL carryover avail in 2021=1603. Taxable income before NOL deduct 0. NOL absorbed=0. Taxable income after NOL deduct=0. NOL carryover to 2022=1603.

NOL worksheet 3: Worksheet 1 line 25=873. Excess loss=0. NOL carryover to next year=873.

I do not want to carry any NOL back, only forward. I keep getting the 80% limitation diagnostic. I don't absorb any NOL do I since taxable loss?

S

strongsilence

Level 10

You must override the amount of post-2017 NOL carryforward absorbed in 2021 so it does not exceed the 80% of taxable income limit.

The NOL absorbed must be 0 (because 80% of negative TI is 0.)

In Screen 15, for the NOLSs at issue, input a -1 in the "NOL absorbed in 2021" box. (You listed 2019 twice but I think you have a 2018 and 2019 NOL.)

Finally, review your NOL carryforward to 2022 as a self-check.

The diagnostic will go away.

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