Jump to content
ATX Community

Claiming tax losses from previous years


FTS13

Recommended Posts

Can someone please guide me as to how to claim a business tax loss from previous years? I have looked into it, but just got more confused with the carrying losses forward/backward...

Client had a business in 2009 & 2010, between the 2 years had losses of $55,000, needless to say, he closed down the restaurant, in 2011 and 2012 he had a W2 job and owes money, can we bring some of his losses forward?

Also a realtor that has major losses in 2010, he can use those losses in 2012 since his income grew three fold.

Thank you everyone for your help, this is my 2nd year in business, I learn so much just in this board!!

Link to comment
Share on other sites

You need to start with the tax year of the loss. Your first client had a loss in 2010. First you determine the net operating loss for the year. There is an NOL worksheet in ATX but you can also get a copy of Form 1045 and it will walk you through the steps to determine how much of an NOL there is.

The hard part is that if the election to carryforward was not made on the timely filed returns, then you have to carryback the loss to the two preceding years. Let's see, 2010 is still open until 4/15/2014. You cannot make the election now but since the loss year is still open, you can amend (1040X) 2008 and 2009 if there is a tax benefit to the carryback.

Start with that. Use the 1045. If there is NOL's unused after the carryback, then you can carry those forward to 2011, 2012 and on for 19? years.

So, first determine the NOL, then determine how much of that NOL is going to be carried back to prior years. Then carry what ever is left over forward.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Restore formatting

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...