Joel Posted February 13, 2010 Report Share Posted February 13, 2010 I have an NOL that is being carried back to a year that the taxpayers itemized. After the carry back the AGI is negative. Do I continue to use the itemized deductions or must I change to the standard deduction? The instructions are not clear in this situation. The decrease in tax is greater if I continue using the itemized deductions. Quote Link to comment Share on other sites More sharing options...
Joel Posted February 15, 2010 Author Report Share Posted February 15, 2010 bump Any thoughts? Quote Link to comment Share on other sites More sharing options...
Gail in Virginia Posted February 16, 2010 Report Share Posted February 16, 2010 I don't really understand the question. If the AGI after the carryback is negative, why does it matter whether you itemize or take standard deduction? Isn't the tax zero either way? Quote Link to comment Share on other sites More sharing options...
Maribeth Posted February 16, 2010 Report Share Posted February 16, 2010 I have an NOL that is being carried back to a year that the taxpayers itemized. After the carry back the AGI is negative. Do I continue to use the itemized deductions or must I change to the standard deduction? The instructions are not clear in this situation. The decrease in tax is greater if I continue using the itemized deductions. Hmmm . . . . . have you determined the amount of the NOL carryback that is actually going to be used in the carryback year? Just off the top of my head, I don't believe that you could have a negative AGI created by the carryback. Figure out what amount of carryback is actually used, it is called the intervening year calculation. That should determine then what your itemized deductions are. Maribeth Quote Link to comment Share on other sites More sharing options...
Joel Posted February 17, 2010 Author Report Share Posted February 17, 2010 I made an error in my original calculations. For ease in calculating the tax after carryback I used a copy of the ATX tax return and entered the carryback as an NOL on line 21. This resulted in AMT cumming into play and being added to the zero regular tax. After realizing my error I redid the return with just a minus entry on line 21 and the AMT was not affected. Now the problem is gone and I have a correct 1045. Thanks for the help anyway. Quote Link to comment Share on other sites More sharing options...
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