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Any Option to Apply Partial or No NOL Carryforward to Current Tax Year?

  
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Subject Author Date
Any Option to Apply Partial or No NOL Carryforward to Current Tax Year? nish 09-02-2008
Posted by nish on September 2, 2008, 9:43 am
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Say you have a substantial net operating loss (NOL) carryforward for your
Federal 1040 and you have only very small amount of income to take against
that NOL carryforward in the current tax year. Is there any option to
apply only a partial amount of NOL carryforward to the current year and then
continue to carry the remaining loss forward? The idea here is that small
amounts of income in the current year are in a lower tax bracket. It might
be smarter to take the NOL forward to a year with substantial income, so
that it is being used to lower your overall tax bracket and has impact in
the higher margins of income.

nish

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Posted by Haskel LaPort on September 2, 2008, 11:39 am
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> Say you have a substantial net operating loss (NOL) carryforward for your
> Federal 1040 and you have only very small amount of income to take against
> that NOL carryforward in the current tax year. Is there any option to
> apply only a partial amount of NOL carryforward to the current year and
> then continue to carry the remaining loss forward? The idea here is
> that small amounts of income in the current year are in a lower tax
> bracket. It might be smarter to take the NOL forward to a year with
> substantial income, so that it is being used to lower your overall tax
> bracket and has impact in the higher margins of income.


The amount you can carry forward to any year is the original NOL less any
allowed or allowable losses taked in prior years. Therfore you either use it
or lose it.


>
> nish

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by removeps-groups@yahoo.com on September 2, 2008, 12:42 pm
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> The amount you can carry forward to any year is the original NOL less any
> allowed or allowable losses taked in prior years. Therfore you either use it
> or lose it.

I think Nish is asking if you can elect to use on a portion of the
carryforward. Example: if the carryforward is 10k, and his income
this year is 30k he can use up all of the carryforward, but it would
be more useful to do it next year when his income is expected to be
150k, in which case the 10k deduction is worth more. I think the
answer to this is no, you can elect how much of the NOL to deduct.

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by removeps-groups@yahoo.com on September 3, 2008, 10:59 am
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On Sep 2, 9:42 am, "removeps-gro...@yahoo.com" <removeps-
gro...@yahoo.com> wrote:

> I think Nish is asking if you can elect to use on a portion of the
> carryforward.  Example: if the carryforward is 10k, and his income
> this year is 30k he can use up all of the carryforward, but it would
> be more useful to do it next year when his income is expected to be
> 150k, in which case the 10k deduction is worth more.  I think the
> answer to this is no, you can elect how much of the NOL to deduct.

Typo. Should have been "you can't elect how much of the NOL to
deduct".

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

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