NOL Carryback

[taxdan]

I am amending a new client's 2008 return to show a casualty loss due to a rental property that burned down in a fire. The loss generates a NOL. Since I cannot choose to carryforward a NOL on an amended return, can I amend the 2007 and 2006 returns to carryback the loss even though we are past the 3 year date and get a refund? I don't think so, but just wanted to be sure.

Thanks!

Dan

[Bart]

You are not past the 3 year date

[taxdan]

How am I not past the 3 year date to amend a 2007 and 2006 return?

[Steve M]

I had a similar situation. The IRS told me to go back to the first year and then go forward. Any loss that is not used in the year that is too far out for a refund can be used in the following years. Depends on the size of the loss and the income of the individual.

smacica

[Kea]

NOL carrybacks make those past years eligible for 1040X -- even if the carryback years are more than 3 years previous.

[taxdan]

Thank you both for your comments. I didn't realize that we could amend past 3 years due to a NOL.

[Maribeth]

Thank you both for your comments. I didn't realize that we could amend past 3 years due to a NOL.

The statute runs from the year of the loss, not the carryback years. If the loss year is still open, the carryback years are open because of that.

[taxdan]

That makes sense. Thank you very much!