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Above the Line $300 Charitable Contribution Increasing NOL

HPMCPAs
Level 2

The above the line $300 charitable contribution is increasing net operating losses.  Also, for taxpayers that don't otherwise have an NOL, if the standard deduction is greater than AGI, a $300 NOL is being generated.  Did the IRS intend for the $300 charitable contribution to generate or increase an NOL or is this a software problem?  Can't find any guidance that indicates the IRS allow this.

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6 Replies 6
gabletax
Level 3

Haven't dealt with an NOL yet this year, but ProSeries used to have an NOL worksheet where amounts could be allocated to business or personal. Maybe there it could be moved to the personal column.

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HPMCPAs
Level 2

Thanks!  I was able to adjust the $300 contribution on the NOL classification worksheet and work out the problem.

mysanity88
Level 1

I ran into this issue today. After a far bit of reading, I cannot find any guidance on how the IRS intended for this to interact with NOLs. 

Can I ask where you made the adjustment to eliminate the NOL?

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HPMCPAs
Level 2

On the NOL Classification Worksheet, I entered a ($300) adjustment on line 19 under Column B for nonbusiness income and it worked my NOL back to $-0-.

vscpanm
Level 3

Ok, that worked. Thank you.

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vscpanm
Level 3

I am thinking the NOL has something to do with a lost contribution deduction. If we were able to itemize and not be able to use up all the contribution deduction, in a normal year we would be able to carryover any deduction not actually used. Maybe IRS is treating this as a contribution deduction carryover and it shouldn't be adjusted. Just thinking.

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