taxdan Posted May 26, 2009 Report Posted May 26, 2009 New client brings me S-corp and personal returns to complete for 2006, 2007, and 2008. I notice on the 2005 return that an NOL had been accumulating up to about $150,000 at that time. It looks as though the election to carryforward was done in 2005. The extremely unprofitable business was closed in 2007. My question... In filing the 2006 and 2007 returns, can I still elect to carryforward the old NOLs to future years? I know I can not carryforward the 2006 and 2007 NOLs since they were not filed timely, only back. I have a lot to learn when it comes to NOLs. Thanks! Dan Quote
kcjenkins Posted May 26, 2009 Report Posted May 26, 2009 Yes, the 05 would be carried forward, even if the 06 and 07 are first carried back. An awkward situation, but not YOUR fault, it's the client's fault. So don't feel bad about the extra work it causes, he's paying for your time and knowledge of the law, and the law gives you no options because of HIS delay. Quote
Maribeth Posted May 26, 2009 Report Posted May 26, 2009 New client brings me S-corp and personal returns to complete for 2006, 2007, and 2008. I notice on the 2005 return that an NOL had been accumulating up to about $150,000 at that time. It looks as though the election to carryforward was done in 2005. The extremely unprofitable business was closed in 2007. My question... In filing the 2006 and 2007 returns, can I still elect to carryforward the old NOLs to future years? I know I can not carryforward the 2006 and 2007 NOLs since they were not filed timely, only back. I have a lot to learn when it comes to NOLs. Thanks! Dan The NOL carryforward reflected on the 2005 return will continue to be carried forward to future years. The NOL's incurred in 2006 and 2007 will first have to be carried back. I assume that there is no income to offset in the carryback, so these NOL's will increase the NOL carryforward from 2005. If the corporation was dissolved in 2007, then you will have to determine basis in order to calculate the loss on the retirement of the stock. I would also assume that your client will have substantial loans to the S corporation in order to fund those NOL's. Maribeth Quote
taxdan Posted May 27, 2009 Author Report Posted May 27, 2009 Thank you both very much. I appreciate the info. Quote
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