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Posted by lifegard2 on March 12, 2007, 8:54 pm
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I screwed up when reading Pub 536 last year and did not
realize form 1045 was something that had to be filed. For
some reason I figured it was something to be done internally
to determine the NOL for the year and then carry it fwd.
As it turns out, I had a NOL of around $40k in 2005. I
figured when I did my 2006 taxes, I'd just plug that number
in and keep trucking. Now I'm learning I was supposed to
file form 1045 along with supporting documentation. I don't
need to carryback the loss as I have little to gain in
previous years, but I do have much to gain moving forward.
For instance, this $40k will reduce my income in 2006 to
zero and net me an additional refund of around $3000 higher
than if I just walk away from it. I figure for $3000, it's
worth it to see how or if I can carry the 2005 NOL forward
to 2006.
Any ideas or am I SOL on this one? As I understand, the 2005
Form 1045 should have been filed by January 1, 2007. Can I
file an amended 2005 return and get around this or am I SOL?
I suppose I could just submit the 2006 Form 1045 as if I had
submitted the 2005, but I'm thinking that will throw up a
flag. I'd prefer to fly above the board.
Thanks for any light you can shed!
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Posted by Frederick Lorca on March 13, 2007, 6:45 pm
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> Any ideas or am I SOL on this one? As I understand, the 2005
> Form 1045 should have been filed by January 1, 2007. Can I
> file an amended 2005 return and get around this or am I SOL?
>
> I suppose I could just submit the 2006 Form 1045 as if I had
> submitted the 2005, but I'm thinking that will throw up a
> flag. I'd prefer to fly above the board.
See "Waiving the Carryback Period" on page 7, column III of
IRS Publication 536.
http://www.irs.gov/pub/irs-pdf/p536.pdf
If you filed your 2005 return on an extension, pursuant to
Treas. Reg. § 301.9100-2, you have until April 17, 2007 to
waive the automatic two-year carryback period. If you still
qualify to waive the carryback period, you can carryforward
your NOL for up to 20 years.
If you don't qualify to waive the carryback period, you must
file a Form 1040X for each of the carryback years, 2003 and
2004, and apply as much of the NOL to each of those periods
as allowable. The remaining NOL then can be carried forward
for up to 20 years.
Frederick Lorca
<< ======================================================= >>
<< 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 (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Phoebe Roberts, EA on March 14, 2007, 12:22 am
Please log in for more thread options lifegard2 wrote:
> I screwed up when reading Pub 536 last year and did not
> realize form 1045 was something that had to be filed. For
> some reason I figured it was something to be done internally
> to determine the NOL for the year and then carry it fwd.
Form 1045 is used to calculate (and request) your refund on
a carryback. For a carryforward, you don't need a 1045,
although it may be helpful in calculating the amount of NOL
you have. However, you do need to have elected to forgo the
carryback.
> I don't need to carryback the loss as I have little to gain in
> previous years, but I do have much to gain moving forward.
I believe that the decision to carry back or forward is
irrevocable, meaning you may be stuck carrying back if you
didn't elect out of it. The default is to carry the loss
back.
*google*
http://www.irs.gov/businesses/small/article/0,,id=128495,00.html
Error: Election to waive carryback period filed late.
Solution: To make the election to carry an NOL and ATNOL
forward without first carrying it back, the election must
have been made with the original loss year return, or filed
with a Form 1040X within six months of the original due date
(excluding extensions) of the loss year return. If the
election was not timely made, the NOL must be carried back
before being carried forward. Remember to attach a copy of
the timely election to the return where the NOL is carried
forward.
Phoebe :)
<< ======================================================= >>
<< 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 (2006) - All rights reserved. >>
<< ======================================================= >>
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