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Georgia net operating loss carryforward for individual

kdt69kac
Level 1

Lacerte does not do the Georgia Form 500NOL.

It also does not seem to generate a worksheet or statement showing carryforwards.

The GA DOR does not seem to like this.

Have you seen this and, if so, how are you handling?

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21 Replies 21
GeorgianaM
Level 1

Did you find a solution to your question? I have a similar problem.

bass
Level 2

you are correct as i have had several returns having the NOL disallowed.  i talked with Lacerte and the agent agreed with me that apparently Lacerte was tracking it but there was not schedule or worksheet to indicate how the state loss was calculated.  The 500NOL form is a pain to do and adds unnecessary time to a return.  Lacerte needs to fix this asap.

TvilleCPA
Level 1

I've had two 2019 Georgia returns get their NOL disallowed.  DOR agent said to submit a spreadsheet with the generation, utilization and carryforward amount.  Has anyone figured out how to access Lacerte's tracking of this?  Client's NOL's begin in 2006!

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bass
Level 2

I just heard from my contact at the state and they have developed some new 500 Nol forms that are year specific as they want one form for each loss year.

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Furbal
Level 2

Because the NOL began in 2006 you can skip the 500-NOL's and just submit a spreadsheet you create to the GA NOL Department. However, the first time you have an NOL created in 2015 or after, you then have to include 500-NOL's for each year involved. I've been through this a bunch of times for our firm now and it's a matter of getting either the 2019 or 2020 Lacerte software to populate the sheets with the data I put in them. Screen 57 is where you go. Sorry there's not a better answer.

Impala
Level 1

Claimed NOL on Georgia Form 500 for tax year 2019.  NOL was carried foward from IRS form 1040.  There are no carrybacks in prior years on the Federal tax returns as computed on form 1040, only carry fowards.  Information was consistently transferred from Form 1040 to State form 500.  Note that the taxpayer's NOL was generated from Form 1120S and entered on Form 1040.  

In tax year 2019 the corporation produced a profit.  It was properly carried to the taxpayer's 1040 income tax form.  The cumulative NOL was computed and then transfered to State of GA form 500. The net NOL was noted on Form 1040.  The entire NOL is based on carry forward amounts.

The State of  Georgia disallowed the NOL citing that the carryback option may have been used in prior years and therefore the carry forward amount should be reduced accordingly.

 

A Form 500 NOL was submitted to State of GA Department of Revenue in accordance with request after the tax return for 2019 was submitted.  Note that this was the first year that the taxpayer's business had produced a profit.  Rather than accept the net carryfoward, the GA Department of Revenue proposed to deny the entire NOL amount shown on the State form 500.  Please that even if the amount calculated as the allowable NOL by the state, there woujld still be negative income reported to the State of GA on the tax return and therefore there would be no tax liability.

Intuit has failed to address this scenario in the tax income program for the accurate computation for the State of Georgia income tax liability.

Georgia has taken advantage of the vague instructions and forms it has provided in this instant case.  The information for clear instruction to provide an accurate rendering of the state tax liability is almost non existent.

Please provide any guidance on the proper computation.

Thanks for any assistance or guidance.  

   

      

 

 

 

 

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Stimey
Level 2

Guys, I have multiple clients with NOL's and Lacerte has dropped the ball on this one. Georgia is being totally crazy about this ; especially when there is no differences between Federal and State Depreciation amounts. 

I have done a spreadsheet with my NOL's for each year showing amounts for NOL, amounts used, etc. 

It appears Georgia will accept your explanation, but they are being sticklers on using the right form 500-NOL for the right year.  

Lacerte needs to fix this NOW !  -

 

scottstabb
Level 2

Can you share the spreadsheet you are using for the carry forward schedule?

we were told to use the carry back / forward schedule and we cant even understand what its supposed to look like carrying a loss forward.  It makes sense for the carry back, but we have not been able to wrap our heads around carrying the loss forward.  

[email address removed]

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detaylorcpa
Level 2

I'm having an opposite problem - Georgia Form 500 is showing the fed NOL on line 15b (which was a carryover from 2018) - but there shouldn't be any GA nol - I can't find an override for this line.

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Furbal
Level 2

If there is Federal NOL activity, it will flow through to GA simply because it existed... You fix this by manually adjusting in or out as needed on GA Sch 1. If there's an NOL and there shouldn't be, you add that back as income on Sch 1. There might even be a line noted for NOL adjustments, I'm not sure on that without looking, but that's where you address it.

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detaylorcpa
Level 2

Thanks - that's the only thing I could think of to do, too - after being on the phone with lacerte for awhile - they don't have an answer. It adds to Sch 1 (it is already there correctly - so it doubles it) and then deducts it back out on line 15b.  The taxable income is correct, but I am afraid they will get another notice due to seeing an nol deduction on 15b. They got a notice for 2019 also as I didn't catch it and they had to pay additional tax.

Furbal
Level 2

If you haven't addressed 2019 yet, go back and do so. The ladies there in the NOL division I've dealt with are all nice and they're just as frustrated as we are about it... so get that tax money back for your client!

Stimey
Level 2

The ones, they have accepted (everyone has been different) so I can not provide a template. Georgia's NOL computation is kind of screw ball because investment (interest income) can come into play. But to answer your question - none were accepted at first. I called the number on the Georgia Response Letter and spoke with a lady in the NOL section. There is usually a wait on the phone while they review what you explain and I know on 4 clients - they accepted my explanation and marked the file. 

 

I have talked with several CPA's down here in Georgia about this and everyone of them are doing what I'm doing now., I am simply on Page 1 of 500NOL putting the NOL amount from previous year on form and going with it. Of course mark box (not carrying back).

 

Once again, Lacerte needs to get on top of this now. I know I have atleast 30 clients with Georgia NOL's all from Depreciation and this could be catastrophic to have to go back and deal with all these manually; especially for the ones that have investment income. 

Stimey
Level 2

The real issue (besides Lacerte) not handling this automatically is :  You have a Form 500 NOL which is multiple pages and guess how long the instructions are for these multiple pages?;  1 page .

 

While talking with the Georgia Department of Revenue ; I told several agents : It's a crying **bleep** shame that you have a 3-4 page form with a single page for the instructions. Not one example is provided in computing a Georgia NOL. NOT one.   

Another interesting fact: ask 3 separate agents the same question and you will get 3 separate differing answers.....

Should I go on.......

 

As I live and breathe in Georgia; Nothing surprises me anymore - not even the election results. 😞

Furbal
Level 2

*shrug* I think the instructions are okay for the form... an example would have been nice though... or even better, just in the line by line directions, say where to get the number from... I mapped out one manually and refer to it all the time for where to get what numbers. It it was all from the GA forms it would be easy but it goes back and forth between Federal and Georgia. Once you have that though, it's not bad. One of the harder parts was to figure out that you put your carry-forwards in as a negative at the bottom of that long worksheet - and then cross your fingers Lacerte will populate correctly. If they would just let me override on the actual form it would make life so much easier.

Stimey
Level 2

Furbal, I have gone through on a line by line basis and you can figure it out by cross referencing etc., but if the return is supposed to take 2 hours to prepare and you end up with 5 to 6 hours in it because of one form the software is not preparing or half way preparing ; it really gets burdensome.

 

One last thing, how many votes on Georgia actually enforcing the 80% limitation of Income for using the NOL against?  Wink , Wink !  

I do clients in 14 different states ; everyone is different to some degree on following Feds or Not at all.

It should be mandatory - if Feds fund the states for certain DOT and other Public works issues - that state should have to follow Federal Tax Guidelines. Cares Act has looked after everyone except the tax preparers.

We should get funded by the States for every return we prepare. 

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bass
Level 2

i agree with that.  had to go back and recreate NOLS for the 2109 returns that had correspondence and even now, the extra time cannot be billed to the client.  The form is a joke and either the state needs to step up or lacerte needs to do something.  Lacerte obviously is tracking the NOL as it carries something forward but there are no worksheets showing where that number comes from or how it is calculated.  I have wasted way too much time on this issue.

MILESCFA
Level 1

Do you have to file the GA 500-NOL ONLY when you want to utilize the losses?

Background: Clients were Ga residents who began renting their GA home when the husband joined the military. First duty station was FL and they were smart enough to become FL residents. From 2017 forward, they had NOLs on their home, but no prior tax pros filed GA tax returns (they have reported and utilized the NOLs on the 1040).  I am assuming that even though the NOLs were used at the FED level, the GA NOLs are suspended passive losses. We plan on filing GA returns next year because we don't want a depreciation "use or lose" situation (ie, depreciation taken or SHOULD HAVE BEEN taken esp. since GA seems to want to disallow a lot of NOLs if not filed exactly right.). The Ga 500-NOL instructions are crap and I cannot figure the correct filing instructions. Somewhere I got the impression the (first) NOL in 2017 should be shown on the 2018 Ga return to be carried forward, and then this combined total should be put on the 2019, etc; however, the "file a GA 500-NOL for each year" instructions seemed to imply you do not file the 500-NOL form until you actually want to use the GA NOLs.

 

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Furbal
Level 2

You actually need to file the loss on 2017 and then for each year forward it is carried, fill it out again. The difference will be you'll add a bit to it each year so it should grow slightly on each form. Take your time and step through the 2017 form (Year of the first loss) and see where the numbers for each line come from and you'll understand it a lot more. A hint... towards the bottom of the worksheet to determine the loss where it says prior year amount used, enter the carryforward as a negative number and it will correctly add it to the current year loss or use it in figuring the current year loss if the current year was a gain that can be offset and still have a carryforward amount.

bass
Level 2

would you be so kind to share your spreadsheet with us so that we do not have to reinvent the wheel.  It would be greatly appreaciated.

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Furbal
Level 2

I'd like to but these boards won't let me attach either an .xls or .xlsx file. Email me directly and I'll send you a copy. dhuntington at caindavid.com