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NOL carryforward 2019

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Hello and good day,

I have a question and I got this new client and has a Corporation (1120) and real estate renting a warehouse, he builds the warehouse and split it and has 8 little ones with the rents and expenses he is negative around -20K if I add the depreciation will go to -50K, 

my questions will be 

 

1- Can I carryforward 50K

2- Were I enter this information as I don't see where to enter 2019 NOL. information

3-  should I depreciate the warehouse or not is the IRS see this big loss can be a concern or not

4- I don't know how to activate the form in Proconnect tax online to show the NO

thanks 

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12 Replies 12
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Level 15

Before we try to answer your question, what has the 1120 got to do with this client, who is apparently an individual?  Are you preparing a corporate or individual income tax return?

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Still an AllStar
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Hello

 

Any advice

 

thanks

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Level 15

@Darknessfall5Please respond to the questions from my post earlier.

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Still an AllStar
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Thank you sir, Im preparing at corporate level the tax form

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Level 15

You haven't told us what kind of corporation it is and we'll assume that PAL wouldn't apply to these rental activities.  Otherwise, what you have is a PAL carryover, not NOL (assuming there is no other business income).

1. You can waive carryback by attaching an election statement.  A checkbox to trigger the statement can be found under Other > Elections on the first line of the Miscellaneous Election section.

2. NOL is automatically calculated and is shown on the Worksheets, which you can preview using the Preview/refresh forms button or the Check Return tab.  NOL input for carryback/carryover and overrides can be found under Deductions > Net Operating Losses > Regular NOL Deduction.

3. There is no such thing as to whether the IRS sees the big loss as a concern due to depreciation.  It is a matter of law whether at-risk limitation would apply, if it is a for profit activity, whether the loss is passive, and how the asset should be depreciated, etc.  These are fundamental determinations you need to make upfront.  If depreciation is to be allowed, the IRS will reckon depreciation on the relevant assets based on what is allowed or allowable even if your client claim a lesser amount or none at all.

4. See #2.

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Still an AllStar
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Thank you and the company is an LLC,  and I got the taxes from the previous tax preparer and he had NOL carryforwards, that is why I was asking how to trigger this in the system.

I'm, not an expert still taking some lessons on the NOL and the PAL is the first time I heard it 

is this more helpful

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Level 15

If you determine that the previous accountant's position is correct, see my response to #2 for how you input prior year carryover.

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Still an AllStar
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NOL.PNG Thanks and just understand the NOL, this 2019 Tax year I will have a loss of 50K when I go and see the preview I don't see any worksheet of the Carryforward for next year (2020), is a section that is under Deductions--->Net Operating Losses-->Regular NOL Deduction, but I don't know if this is the correct place. or how do I trigger the worksheet to show the carryforward of 50K?

1- Is this carryforward I will just add manually next year or I will have a form to state that carryforward

Thanks and sorry if I ask you many questions just don't want to make a big mistake

 

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Level 15
  1. You will need to update on that screen carryover from prior years;
  2. Assuming your client waives the carryback, you need to trigger the election statement as explained;
  3. NOL from 2019 will be carried over to 2020 automatically so long as you proforma the 2020 return next year.
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Still an AllStar
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Hello again, 

I try your suggestion and follow your advice by going to 

 

Election and misc and select the 1st option

I try to preview and I don't see any change or worksheet for the NOL

can you please see the picture and let me know if I did it right

After doing this should I have a worksheet or schedule telling me the NOL carryforwards or not

 

NOL2.PNG

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Hello again, 

I try your suggestion and follow your advice by going to 

 

Election and misc and select the 1st option

I try to preview and I don't see any change or worksheet for the NOL

can you please see the picture and let me know if I did it right

NOL2.PNG

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Highlighted

Hello again, 

I try your suggestion and follow your advice by going to NOL2.PNG

Election and misc and select the 1st option

I try to preview and I don't see any change or worksheet for the NOL

can you please see the picture and let me know if I did it right

 

thank 

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