NOL carry back

[Pacun]

C Corporation had a loss in 2011 of $10K. No election was made and no extension was filed. Must the company amend 2009 and use the the NOL or it can just use the NOL in 2012?

[Elrod]

Pacun, this should help you.

http://www.irs.gov/instructions/i1139/ar01.html#d0e189

[OldJack]

You must carry back as no election was made in 2011 to carry forward.

[Pacun]

The NOL is 10K for 2011 (first NOL ever), in 2010 the company had income of 4K and in 2009 the company had income of 50K. Both 2010 and 2009 were audited and a bit was changed in both years. Can I amend 2009 and use it all? What figures do I use for the amendment, the ones the taxpreparer sent to the IRS or the ones from the IRS auditor after the adjustments?

Thanks.

Let's say that in 2012, the company has a 12K NOL and no election is made, can 2009 be RE-AMENDED?

[kcjenkins]

Use it all in the earliest year, if possible. Use the 'corrected numbers from the audit if the audit has been completed.

[Pacun]

Thank you for the information. It seems that I can amend 2012 before Oct 15 and attach the election to use the NOL only on future years.

[OldJack]

>>C Corporation had a loss in 2011 of $10K<<

>>It seems that I can amend 2012 before Oct 15 and attach the election<<

The 2011 tax year loss had to have a carryover election on the original or amended 2011 tax return for carryover to 2012 and future years to apply.

[Pacun]

Can I amend the 2011 return in 2 years AND make the election?

[OldJack]

sure! But why in the world would you not want a refund from prior years? Those are taxes you can recover when you will never have another chance to save.

[Pacun]

That was a quick reponse. Thanks. I think you can amend AND make the election only before Oct. 15.

[jainen]

>>you can amend AND make the election only before Oct. 15<<

Hey guys--original post was about a C-corp. Election can only be made on a timely-filed (including extensions) original return. (Even if it could amend within 6 months like individuals, estates, and trusts, that would run out Sept 15 for a calendar year c-corp.) [let's see--source is Pub 542, compare with pub 536.]

[OldJack]

@jainen : Maybe I'm wrong but I don't see the word "original" regarding a "timely filed return". Isn't a timely amended return timely filed. And the code below says "Any taxpayer". Are you saying a 1040 taxpayer is different than a C-corp on carryback time?

IRC Sec. 172 ( b ) (3) Election to waive carryback

Any taxpayer entitled to a carryback period under paragraph (1)

may elect to relinquish the entire carryback period with respect

to a net operating loss for any taxable year. Such election shall

be made in such manner as may be prescribed by the Secretary, and

shall be made by the due date (including extensions of time) for

filing the taxpayer's return for the taxable year of the net

operating loss for which the election is to be in effect. Such

election, once made for any taxable year, shall be irrevocable

for such taxable year.

[OldJack]

I would point out that the only time I have ever elected to carry forward was when there was no tax to recover with a carryback.

[jainen]

>>don't see the word "original" regarding a "timely filed return"<<

Well, do you see the words "in such manner as may be prescribed by the Secretary"? That's why I cited the IRS publications instead of the code. And no, filing an amended return timely is not the same as filing a return timely.

[Pacun]

Jainen,

Are we in agreement that the deadline for me to amend and select to forgo the carryback period was due on 09-15-2012? So, now my only choice is to amend previous years, correct?

[jainen]

>>Are we in agreement... my only choice is to amend previous years, correct?<<

Jainen in agreement? Surely you jest! Read the Instructions for Form 1139. They even disagree with myself concerning my previous rant about amending.