1045 Application for Tentative Refund NOL Carryback for 5 Years
The Lacerte input screen, like Form 1045, has three columns for prior year tax information. A five-year carryback will require two copies of the form, and two pages of the input sheet.
The order of the columns is critical.
To add five carryback years on Form 1045:
Create columns for each carryback year:
- In the current tax year, go to Screen 60, Application for Tentative Refund.
- Enter the data from the prior year's 1040s. Start in the left column for the oldest year, and work right. (If the current year is 2016, for a five-year carryback, then Left Column = 2011, Center Column = 2012, Right Column = 2013.) However, when dealing with less than three years, enter the most recent year, the one last affected by the NOL carryback, in the right column. (e.g., if the current year is 2016, and the NOL is being carried back two years, enter 2014 figures in the center column and 2015 figures in the right column.)
- When all three years have been filled, click the "add" button on the left side of the window to start a new input sheet. In the right column add your next most current year going and the next earliest year in the center column. (Ex.: Center Column = 2014, Right Column = 2015).
Calculate changes in tax (using prior year Lacerte program as a scratchpad):
- Open Lacerte for the first year of the carryback, (in this example: 2011).
- On Screen 59, Amended Return (1040X), marking the return as amended.
- On Screen 15, Net Operating Loss, Enter the Year of Loss, Initial Loss, AMT Initial Loss, Carryover available in 20XX
- Click on the Forms tab to calculate the return.
- Print the recalculated 1040 return. You will need these values for entry in the current year program.
- Repeat for each carryback year.
Enter the reduced tax numbers for Form 1045:
- Go to Screen 60, Application for Tentative Refund, in the current year's Lacerte tax program,
- Using the NOL worksheets that were printed, enter the data in the three columns.
- In the upper left hand corner, under Refund, click Add. (The Add button is in the same location as if you were adding a State or a W-2.)
- Repeat for the remaining two years.
After you add another refund you will start in Column 3 again and work backward. You will begin by entering the tax year in Step 2. This will override the programs default year.
Form 1045 can only be completed within 1 calendar year of the initial loss. If 1 year has passed, each prior year return must be individually amended, carrying forward any loss that cannot be taken to the next year.