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Mysterious NOLs on Sch C Clients


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I dont know if the latest federal updates or program updates to TaxWise are causing an error but I just did two Sch C returns and both had erroneous NOLs.

One of them had net income / agi of about $75k last year and carried forward a $26k NOL. The other was a bit more difficult to nail down but was definately not correct.

I talked to tech support and they claim its a proforma conversion issue that they are aware of. Geez.

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Thanks for the head's up. I'll make sure to watch for it.

Had one yesterday that threw in an AMT form (not even close). Didn't think too much about it, but did see it got included in the e-file. I sure hope that doesn't cause any issues.

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I got one similar yesterday , my client has 2 sch c, one sch e , one sch a so when I was in the last check I noted a 26k nol . I supposed to it was a proforma error due I was not able to find the source... I just ignored it and override the amount then I efile and get acknowledgment as approved for IRS and state .

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Guest Taxed

Is this a brand new client file or a conversion? If it is a conversion pay careful attention to what gets carriedove from your prior software. I have had junk in certain lines which made no sense. What I do is open the return in the prior years version (2011) and run it once and see the results to make sure it matches what I had in my actual 2011 run. If it passes then I convert that file. I DO NOT do bulk conversions of all my clients at one pass. I seem to recall from years back that was a source of lots of junk data creeping in files. One at a time is a pain in the a** BUT at least you know what you are getting. In short carryforwards are a sore point on any conversion case.

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Hmm, this has happened to me as well. Yesterday, I had opened up the Taxwise converted version of the 2011 Taxworks return that had a strange NOL. I noticed that the converted return was not complete! Most of the Schedule C income was gone, so the return showed negative taxable income, thus the NOL was created.

I did an override.

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I'm going over every 2011 return in TaxWise to make it match what was filed. TaxWise specifically says they don't convert everything-- just the info you'll need to carry forward to 2012.

But I want everything in there so that my 3 year comprison shows the right info.

As with any conversion, watch the depreciation!

I haven't run into the NOL problem, yet.

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The biggest issue I've had with the depreciation has been missing categories (i.e. fixtures and furniture, etc.). It also likes to make all assets have ownership "J" (joint).

The only state conversion I've looke at so far was North Carolina. It appeared to have most of the info.

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Guest Taxed

In TW if you have a Statutory Employee W2 and you converted from Taxworks, watch out you will get a NOL and you must override. You can not figure out where that figure comes because there is no link to a worksheet. Real funny!!!!

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  • 3 weeks later...
Guest Taxed

Well it happened last night once more. A small NOL (like 3800 or so) showed up on other income. Could not hunt it down as it was getting late so I just overode the line.

The Sch C has net profits for the last 2 years there is a rental loss for 2012 but I can't seem to figure out where the NOL was generated because page 2 of 1040 is still positive!!

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I had an NOL pop-up on my 1041 last week. The return had a net loss, no Sch C, Sch E profit & capital gains loss. NO business-type loss at all. I was wondering if there was something different for the 1041.

When I went to the NOL form, TaxWise had a red line on the business (or non-business?) capital gain input. I filled that in & the NOL went to $0.

Not sure if that helps your case or not?

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  • 4 weeks later...

I think I figured out when this happens. Last year, in Taxworks, I had several folders set up and some of the returns with duplicated and used for certain scenarios. It seems that clients with a duplicated return had the strange NOL.

That could be. I too had several folders with client scenarios. Cant say if they were the one that got the NOLs

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