Unused Sch A deductions rolling over as NOL?

[Janitor Bob]

In tax year 2010, client had $12,687 in schedule A deductions. Due to rental losses and no other taxable income, she had AGI of -$2356. So hr taxable income was zero.

ATX is taking the amount on her 2010 1040 line 41(-15043) and rolling that over to 2011 as a NOL carryforward....Is this correct?

[Janitor Bob]

In 2011, Client again had Sch A deductions that exceeded her AGI by about $9,000...so again zero taxable income. ATX is taking 1040 Line 41 from 2010 (-15,043, which is negative AGI plus Sch A Deduct) and adding that to unused Sch A dedcutions of $9000 from 2011 and making that A $24043 NOL carryforward to 2012

since when can you carry over unused Sch A Deductions that are not charitable donations?

[Pacun]

Even if the program is correct, you have to delete them since you didn't make the election to forgo carry-back.

[Janitor Bob]

The problem was with the non-business deductions....in other years, ATX automatically pulls this from 1040 line 40....For some reason, in 2010 ATX did not do this....and I did not think to check it...shame on me.....so it was erroneously carrying over to later years....I went back to 2010 and entered the Sch A deduction on the NOL worksheet for non-business deductions and the carry-forward was gone.

A shameful example of relying too much on the software....I should have caught this in 2010!