99mtamchamp
Level 2
‎10-20-2021 10:11 AM

I have a client who won about 30000 in a raffle.  Half was cash the other half was a motorcycle.  He's gong to keep the cash and donate the motorcycle to a local charity.  He has a large NOL that was generated from a partnership from 10 years ago.  Is there any reason the NOL won't reduce the winnings to zero.  I've talked to other professionals and it seems there is a split in their opinions.  Thanks

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IRonMaN
Level 15
‎10-20-2021 10:29 AM

If you can't get a consensus from other professionals, it sounds like time to do some research and come to your own conclusion since you will be signing the return.  Google is a good friend to have.

nol carryforward rules - Google Search


Slava Ukraini!
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sjrcpa
Level 15
‎10-20-2021 10:35 AM

The NOL won't reduce the winnings.

It will reduce AGI.


Ex-AllStar
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sjrcpa
Level 15
‎10-20-2021 10:37 AM

Are you sure that's a 10 year old NOL? Why wasn't it used in the last 10 years?

Might it be a passive loss carryover? Or a loss in excess of basis?


Ex-AllStar
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BobKamman
Level 15
‎10-20-2021 10:52 AM

I've had more than one client with an NOL carryover that ended only with their death many years later.  Typically, someone with a disaster in high-risk years will retire and need only $20K or $30K a year to reduce their AGI to zero.  I keep a "permanent comment" in the files (hard copy and software) to remind me of when it eventually runs out.  25 years for some of them?  

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