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Corporate module Ref #25225

YOLOTaxes
Level 3

I am working on a client with an NOL from the last couple years. I have a diagnostic #25225 saying "Current year net operating loss is not reflected in carryovers to 2020 because the election to forego the carryback was not made."

Now, there is normally a checkbox for this election, and if you click the diagnostic, it use to take you to the election. However, I cannot seem to find it.

Anyone else experienced this already yet?

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6 Comments 6
sjrcpa
Level 15

New rule, part of the CARES act, is that an NOL goes back 5 years.


Ex-AllStar
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YOLOTaxes
Level 3

Thank you for pointing that out, I understand the CARES Act changes. My question is in regards to the election to forego the carryback and the change in the checkbox for that election. 

Mtnsummit
Level 1

Sorry I do not have the answer, rather I have the same exact question as you. How to make the election to waive the NOL generated in 2019, for a C-Corporation. Anyone?

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jrescpa1
Level 2

The election to waive the NOL carryback period is on screen 41 in the form 1120 program for 2019. Note that there is a check box at the top of the screen and also a separate section for CARES ACT NOL Elections on the same page. It used to be located on screen 23.1 in years through 2017.

Refer to Rev. Proc 2020-24 for more info. on the Cares Act Elections. Here is some general info.

A taxpayer’s election to forego carrybacks for NOLs arising in a taxable year beginning in 2018 or 2019 must be made by the due date (including extensions of time) for filing the return for the taxpayer’s first taxable year ending after March 27, 2020.  Thus, a calendar year taxpayer must elect for either 2018 or 2019 NOLs by the extended due date for the 2020 return, which would be October 15, 2021. A taxpayer’s election to forego carrybacks for NOLs arising in a taxable year beginning in 2020 must be made by the due date (including extensions of time) for filing the return for that year.  It is expected that the Internal Revenue Service (IRS) will soon issue procedural guidance on how to either request refunds for NOL carrybacks or elect to forego carrybacks, similar to guidance issued for the 2009 five-year NOL carryback legislation (Rev. Proc. 2009-52).

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kgcpa0899
Level 1

So, are we to not do anything with the 2019 loss that we want to carry forward only?

wait till next filing season to make the election?

do we at least checkmark the box 11 on schedule K 1120?

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lescorbin
Level 1

Thank you. Help doesn't say where elections are.

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