Have a Tax Question? Ask a Tax Expert
Based off of the above information, here is what you have:
- $22,200 Net Operating Loss carryover (or carryback)
- $36,000 Unallowed passive loss carryover
- $13,000 Capital loss carryover
1) A net operating loss (NOL) can be used to offset any type of taxable income. It can be carried back up to 3 years to claim a refund in a previous year that you paid tax. It can also be carried forward 20 years to offset future taxable income.
2) Prior year unallowed passive losses may indeed offset future taxable ordinary income is passive activity rules allow it. They may also create an additional NOL in future years if there is less taxable income than allowed passive losses.
3) You are essentially using $2800 of your current year passive loss to offset the other income.
Line 13 will say -3,000
Line 17 is -25,000
Correct, actual losses reported on D & E. Please don't let the negative $3K on line 13 confuse you. Since you received no benefit, it still carries forward.
Great, thank you.