Catherine Posted November 16, 2016 Report Share Posted November 16, 2016 Hi folks, I'm going to play stupid here (always good to stick with your strengths) and ask. Corporate client (on a fiscal year) has an NOL for fiscal 2015. In general with individual NOL's I have just elected to forgo carry-back because it's a pain and would not have done the clients much good (especially after paying my fee to amend prior-year returns!). However, this corporation got hit with some sizable tax bills in the last couple of years. Plus the owner is in her 80's and we don't know who is going to take over as she slows down in the next couple of years *and* there will still be carry-forward losses for a while even after carry-back. So I'm thinking we should carry this back two years. Question #1: standard amended return for the prior-year 1120's, yes? Question #2: do I make any adjustments on the 2015 return for the amounts that are going to be carried back? Or do I do that next year (which means putting in a reminder to myself not to forget a whole year from now!). TIA, Catherine Quote Link to comment Share on other sites More sharing options...
BHoffman Posted November 17, 2016 Report Share Posted November 17, 2016 I'm in the same boat. 1. I'm going to do the standard amended for the prior year(s). 2. No adjustments on the 2015. 3. I'm going to have to check and see if AZ allows corporate carrybacks. If not, then I'll have to make a carryforward note as a reminder. Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted November 17, 2016 Report Share Posted November 17, 2016 I have not done a corporate NOL, but I think there are 2 options. 1. File the 1120X and mail it in. 2. File Form 1139 with the 1120 for the year in which the NOL occurs. Not sure what the advantages or disadvantages are of each method. Tom Newark, CA 2 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted November 17, 2016 Report Share Posted November 17, 2016 The 1139 is a request for a tentative (quick) refund and must be filed within one year instead of the longer 3 year period allowed for the 1120X, and with the 1139 the IRS is supposed to act on it within 90 days. The 1120X is a claim for refund (not tentative) and the tentative vs actual claim comes with differences related to the SOL. Rather than me explain it all out, I've included links to two articles that explain it better than any summary I'd give here. The articles are older and the carryback period allowed has changed, but the basic differences and effect of using one or the other of the forms hasn't. Article from The Tax Advisor (and also has a linked "exhibit" summarizing some of the differences in the last line of second section entitled "Background" : http://www.thetaxadviser.com/issues/2010/mar/nolcarrybackclaimscanunlockclosedstatuteoflimitationyears.html Article from The Free Library online: https://www.thefreelibrary.com/Practitioners+beware+-+use+of+Form+1045+or+1139+may+create+unexpected...-a018973034 3 Quote Link to comment Share on other sites More sharing options...
Catherine Posted November 17, 2016 Author Report Share Posted November 17, 2016 @jklcpa -- thank you, Judy!! Quote Link to comment Share on other sites More sharing options...
OldJack Posted November 17, 2016 Report Share Posted November 17, 2016 You should state if the corporation is a 1120C or 1120S. We assume a C Corp. 2 Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted November 17, 2016 Report Share Posted November 17, 2016 Good Point Jack. Tom Newark, CA Quote Link to comment Share on other sites More sharing options...
OldJack Posted November 17, 2016 Report Share Posted November 17, 2016 I have had C Corp NOLs many times and simply file 1139 with 2 attachments of page 1 of 1120C marked "original" and "as amended". Quote Link to comment Share on other sites More sharing options...
Catherine Posted November 17, 2016 Author Report Share Posted November 17, 2016 Sorry, yes C-corp. Thought that was clear by referencing an 1120 not an 1120S. I said I was sticking to my strengths... 4 Quote Link to comment Share on other sites More sharing options...
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