EXPIRATION OF LOSS CARRYFORWARD

[BLACK BART]

My client had a loss in 2014 and hasn't filed that return or 2015 either.  I'm going to try and get him to catch up, but he usually won't until they run him to ground and make him ante up. 

I know the option to get REFUNDS expires after three years but he always owes anyway. So my question is, if he waits until AFTER 4-15-18 to file (very likely), can I still file the '14 loss return, elect to carry if forward, and have that loss REDUCE TAXES in the succeeding years (15-16-17-etc.)?  Or does using the loss expire after three years just like the refund option?

I believe I can still use it, but it's been so long since I did such as this that I don't remember for sure.

Any opinions? Thanx. Luddite  BB here (I PROMISE I'm gonna take a look at that Alma's 10-Key thang )

   

[Abby Normal]

Assuming you're talking about an NOL, the pubs says that the election to forego the carryback must be file by the extended due date.

https://www.irs.gov/publications/p536/ar02.html#en_US_2015_publink1000177379

But I'm pretty sure the refund limitation increases to 5 or 6 years when an NOL is involved, so all may not be lost. And you will have to file 1040X because 1045 must be file within 1 year of year of the loss.

Here you go:

25.6.1.10.2.8.1  (04-01-2007)
Net Operating Loss (NOL) Carryback or Capital Loss Carryback

 

1. A claim for credit or refund based on the carryback of an NOL under IRC Section 172 or a Capital Loss under IRC Section 1212 may be filed within the three year period from the due date of the return ( for the taxable year of the NOL or Capital Loss which results in such carryback) plus the period granted for any extension of time to file for the year in which the NOL or Capital Loss is incurred. See IRC Section 6511(d)(2).

   Note:

   The three year period runs from the extended return due date regardless of when the return is actually filed. The three year period may be extended through a consent to extend the period of limitations on assessment. See IRC Section 6511(c).

[BLACK BART]

Thanks, Abby N -- That answers my question even if it doesn't cure my (his) problem. Two carrybacks and then forward -- what a mess.  He's really a nice guy but he's so broke he can't pay attention; much less the fees for two pointless carrybacks and several c-forwards; to say nothing of the tax he'll owe. This is going to be a test of spiritual character (concern for my fellow man) since there'll be next to zero chance of any fee collections (oh well; my office needs painting).  Seems like 1099 construction workers are always falling into the trap of nothing withheld, broke at year end, and SE piling up for 3-5 years until they're in for 20K with all the crushing penalties plus compound interest piling up 'til they can never get out; just trudging on an installment treadmill far into the future.  But, such is life; the old man used to say.

By the way, that is the confoundedest avatar I've ever seen. Where'd you get it? Is that you or a mad scientist (accountant) having a very good day?       

____________________________

"Now, here you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that." -- LEWIS CARROLL -- ALICE THROUGH THE LOOKING GLASS.

 

 

[joanmcq]

You've never seen Young Frankenstein?  Marty Feldman as Igor. Pronounced Eye-gor.  Gene Wilder as Dr. Frankenstein. Pronounced Frunkensteen. 

[Abby Normal]

3 hours ago, joanmcq said:

You've never seen Young Frankenstein?  Marty Feldman as Igor. Pronounced Eye-gor.  Gene Wilder as Dr. Frankenstein. Pronounced Frunkensteen. 

One of the funniest movies ever!

I used Young Frankenstein and Clerks as a test for potential mates after my divorce. If they were offended or didn't laugh their ass off at these two movies, I knew it would never last.

[Abby Normal]

 

[RitaB]

13 hours ago, BLACK BART said:

Thanks, Abby N -- That answers my question even if it doesn't cure my (his) problem. Two carrybacks and then forward -- what a mess.  He's really a nice guy but he's so broke he can't pay attention; much less the fees for two pointless carrybacks and several c-forwards; to say nothing of the tax he'll owe. This is going to be a test of spiritual character (concern for my fellow man) since there'll be next to zero chance of any fee collections (oh well; my office needs painting).  Seems like 1099 construction workers are always falling into the trap of nothing withheld, broke at year end, and SE piling up for 3-5 years until they're in for 20K with all the crushing penalties plus compound interest piling up 'til they can never get out; just trudging on an installment treadmill far into the future.  But, such is life; the old man used to say.

You really are the absolute best, and it is a shame you have only 52 posts.  We need you.  I'm only going to say it one time. 

[RitaB]

3 hours ago, Abby Normal said:

I used Young Frankenstein and Clerks as a test for potential mates after my divorce. If they were offended or didn't laugh their ass off at these two movies, I knew it would never last.

I am using "if your truck costs more than your house and you own neither, we can't be friends."  I watch TV a lot.

[joanmcq]

I like Dogma as a test myself. YF is such a classic - might have to give it a look again soon. 

[Abby Normal]

Dogma is another favorite. It' related to Clerks.

[Catherine]

If you want wacky, offbeat, and FUN, have you watched Undercover Blues with Dennis Quaid and Kathleen Turner?  Or Real Genius with Val Kilmer?

[Abby Normal]

So many movies, so little time.

[FDNY]

Funny, I think I get most of my culture from movies.  May not be saying much for me, but it does work well at parties.