NOL

[HOPE2]

I am completely stumped. Line 14 a and 14 b in Carryover worksheet has 2 column for 2020 and 2021.

But my client has NOL from 2019 so no column for 2019 year. Where can I enter 2019 NOL and also client has QBI carryforward of that year,2019, but front line 29 there is not a box for 2019.

Thanks in advance!

[Frustrated-in-IL]

A 2019 NOL has to be carried back unless you made a timely filed election to forego carryback.

Assuming you made the election, the 2019 NOL would have been carried forward to 2020.  If not used entirely on the 2020 return, the remaining amount would be included in the amount being carried to 2021.

QBI comes forward in same manner.

[HOPE2]

Thanks. Client is new for me and the election would have been created for carryback but it is suppose to carryforward. I was wondering for carryforward case the election should it have been created? If not, my question is about line 14a , 14 b that 2019 NOL and AMT should be entered but no see 2019 year and line 29 have no 2019 year for QBI as well.

[Frustrated-in-IL]

The CARES Act mandated a 2019 NOL be carried back unless an election to waive was made.  If election to waive was made, then NOL went to 2020.  If it wasn't fully used in 2020, then it is coming forward to 2021 on line 14a from the 2020 column.  There isn't a 2019 column because there is nothing from 2019 going to 2021.  2019 has to go to 2020 first and now becomes part of the 2020 carryforward to 2021.

QBI losses have to come forward.  If a QBI loss originating in 2019 wasn't used up in 2020, the remaining amount becomes part of the 2020 column amount being carried to 2021.  Again, no need for a 2019 column.

Both NOL and QBI losses carry forward indefinitely.

[HOPE2]

Thanks a lot. I am not sure wave election was made by pervious tax man for carryback in 2019 when client had NOL and QBI loss. Since client new for me, how can I find out regarding the election if it was made in 2019 return? Also in his 2020 tax return I did not see any carryforward NOL however client had QBI loss with no NOL in 2020. Now, with this situation is it ok to enter 2019 NOL in column 2020 or should it be in the 2021 column? If it is ok, should I consider QBI loss for two years, 2019 and 2020 as well? I mean should both carryforward to 2021 return.

Greatly appreciate this community

[TaxGuyBill]

---

@HOPE2 wrote:

I am not sure wave election was made by pervious tax man for carryback in 2019 when client had NOL and QBI loss. Since client new for me, how can I find out regarding the election if it was made in 2019 return?

should I consider QBI loss for two years, 2019 and 2020 as well? I mean should both carryforward to 2021 return.

---

Do you have a copy of the 2019 and 2020 tax returns?  If so, you should see that statement to "Waive the Carryback"  (it should be on  a separate piece of paper).

If you have the returns and don't see the statement, then the election was not made.

Assuming the election was not made, then the next step is to determine if Form 1045 was filed to claim the NOL.  It would have been a separate filing, and the taxpayer would have received a separate return, so the taxpayer should hopefully know if that was done.  My first guess it that is was NOT.

Assuming that is the case, then the 2019 NOL is carried BACK to 2014, and you need to amend the 2014 return to claim the NOL (and if 2014 does not use up the NOL, it would be carried to 2015, then 2016, etc.).

For QBI, yes, you need to carry forward all QBI losses.

[HOPE2]

I have checked 2019 and 2020 client return and tax preparer did not make "Waive the Carryback" election to Forego section 172. Taxpayer does not want to use carryback at all since nothing income before 2019. For 2021 he has enough income and want to use NOL from 2019. That is why I need a help moving forward.

[TaxGuyBill · Accepted solution]

---

@HOPE2 wrote:

Taxpayer does not want to use carryback at all since nothing income before 2019.

---

It does not matter if he WANTS to carry it back or not - it gets carried back.

Even if he chooses not to amend, you need to recalculate the NOL based on carrying it back for each year 2014, 2015, 2016, 2017 and 2018. It is likely it will be reduced, especially if there is ANY income in any of those years.

After you recalculate *IF* there is any NOL to carry forward, then it carries to 2020, then to 2021.

ProSeries does not keep track of which year a NOL is from, so you need to manually do that.  Yes, the carryforward amounts go on Line 14 of the carryover worksheet.  The usable NOL should show up as "other income".

[HOPE2]

Thanks in advance. For carryforward QBI loss can we do partially. However, net QBI for 2021 is enough to offset all QBI which carried forward from 2019 and 2020. I see if I do it all of carryforward negative QBI, client should pay more tax.

[TaxGuyBill]

Enter the full amount of negative QBI carryforward.  The program SHOULD only offset the proper amount and automatically carry the rest forward.