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William Ellis, CPA
William Ellis, CPA, CPA
Category: Tax
Satisfied Customers: 296
Experience:  Over 15 years of experience in public accounting
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We have an s-corp & had a million dollar loss in 2008. In

Resolved Question:

We have an s-corp & had a million dollar loss in 2008. In 2009 we had a profit. I didn't think it would be a problem, because of the loss carryover. Unfortunately, it looks like the alternative minimum tax takes most of that loss from previous years away & I wind up with a almost the same profit I would have had without previous years' losses.

Does that sound right, or am I missing something?
Submitted: 3 years ago.
Category: Tax
Expert:  William Ellis, CPA replied 3 years ago.
Chat Conversation Started
William Ellis, CPA :

First of all, was an election filed with the 2008 return to forgo the 2 year carryback period? If not, has the NOL been properly applied to 2006 and 2007 already? Let me know about this, then give me some actual numbers you're dealing with concerning the 2009 return. Thanks, Bill

Customer :

No forgoing carryback. Losses every year until 2009.

Customer :

2008 loss was a little over a million, 2009 profit was $263K

Customer :

Did you leave?

Customer :

Ugh!

Customer :

The urgency was supposed to be high!

Customer :

I wish you would have just answered the question at least a little bit.

Customer :

Hello?

Customer :

Unfortunately, I need this answer now.

William Ellis, CPA :

Sorry, I was answering another question. If there were also losses in 2006 and 2007, tell me how much the NOL is, how much 2009's net income is, if there is a capital loss deduction, and how much your itemized deductions are by classification--taxes, interest, charitable, etc. Thanks, Bill

Customer :

I did; i just want a general answer!

Customer :

And you are gone again!

Customer :

Can you just answer the question? It is very general. Please read what I wrote!

William Ellis, CPA :

There's not a general answer to this, because the AMT will vary with amount of income you had and the NOL. Give me some figures, and I'll give you an answer today. Thanks, Bill

Customer :

Are you there?

Customer :

Nope!

William Ellis, CPA :

AMT will decrease when the NOL is factored in.

William Ellis, CPA :

Do you still owe AMT after the NOL is factored in?

Customer :

I did give you numbers above. Can you give up this question so someone else can answer it, please?

William Ellis, CPA :

I'll have to get my son off the school bus in a couple of minutes. I'll be back in 10-15 minutes. You didn't give me your 2009 AGI before and after the NOL. I'll be back in 10 min.

William Ellis, CPA :

if you don't have any net income for 2009 after the NOL is applied, you won't have any AMT either. Thanks, Bill.

Customer :

2009 AGI before nol -817,530

Customer :

Sorry AGI before nol is $200k in payroll checks

Customer :

AGI before ATM is -817,530

Customer :

Tax after ATM is $56K

William Ellis, CPA :

How are you figuring your taxes? Are you using a tax program?

Customer :

Yes proseries

William Ellis, CPA :

Give me a few minutes to look something up. I'll be right back.

William Ellis, CPA :

Print Form 6251 from the program. Let me know when you have that in front of you.

Customer :

What did you find?

Customer :

Line 1 -817,530

William Ellis, CPA :

I'm looking at the Form 6251. Do you have yours in front of you?

Customer :

Line 11 1,049,530

Customer :

Line 20 25,000

Customer :

Line 29 257,000

Customer :

Line 30 44,200

Customer :

Line 31 212, 800 & 56,084

Customer :

Those are the numbers from 6251 Alternative Minimum Tax

Customer :

I am looking at it

William Ellis, CPA :

Did you have an AMT calculated NOL for 2008? You should have. It may be the same amount. Can you check on this?

Customer :

6251 for 2008 line 29 is -1,038,170

Customer :

There was a huge k-1 loss from the s-corp & losses from the s-corp for every year before that

Customer :

This year is the first year we have had an s-corp profit

Customer :

profit is $260K

Customer :

Should I be able to carry my loss over to cover the s-corp gain, or does it all get eaten up by ATM?

Customer :

Is that the reason for ATM?

William Ellis, CPA :

Look at your NOL calculations from 2008. You should have either a calculated amount for AMT or an additional full calculated page titled AMT NOL calculation. This amount needs to be entered in the carryforward info next to where you entered the NOL. It goes on line 12 of Form 6251 and will offset the NOL amount. This will eliminate all or most of the AMT.

William Ellis, CPA :

If you don't have any worksheets from 2008 showing the AMT NOL, enter the amount of the NOL in as the AMT NOL then check Form 6251 again. Thanks, Bill

Customer :

It's a full nol worksheet for 2008

Customer :

2008 carryforward worksheet has $1,049,530 in 14a Net operating loss to carryforward

William Ellis, CPA :

Go to 2009 Turbotax where you entered the NOL, and you should see a box to enter the amount of the AMT NOL. Enter the same amount in that box.

William Ellis, CPA :

How did this work?

Customer :

2009 line 12 of form 6251 if I drill down is line 1 $257K - line 4 $257K - Line 5 $231,300 & botXXXXX XXXXXne 11 0

Customer :

Okay so I am at the 2009 Carryover worksheet & I have line 14a Net Operating Loss Available to carryforward 1,049,503

Customer :

The next line 14b ATM net operating loss available to carry forward is zero

Customer :

I should put my !,029,503 in line 14b, right?

Customer :

In the 2008 column

Customer :

Which will make the 1,049,503 loss for atm carryforward to the 2009 return

William Ellis, CPA :

Don't over-ride that. Where is the NOL entered originally? Can you double click on Line 12 of the Form 6251 to get to an entry screen? If not, just over ride the $0 on Line 12 of Form 6251. This should result in Line 29 being around -$791,000 which should also be your NOL carryforward to 2010.

William Ellis, CPA :

I'm talking about on the 2009 return. Don't change anything on 2008.

Customer :

Line 11 on 2009 6251 is 1,049,503 - Line 12 is blank

Customer :

It is automatically calculated from the $257K, $257K & $231K abaove

Customer :

The challenge is the calculation for line 12 of the 6251 which is calcuated to 0

William Ellis, CPA :

Go to where ever the NOL is originally entered. There should also be a box to enter the AMT NOL.

Customer :

in the calculation there is a place to enter the alternative miminum tax net operating loss (ATM NOL) is that what I am missing?

William Ellis, CPA :

That's what you're missing.

Customer :

Yay!

William Ellis, CPA :

I'm going to the store. I'll be back in 30 minutes.

Customer :

So since there was no ATM carry forward entered in 2008 it didn't hit 2009, so just put it in

Customer :

My NOL to carryforward & my ATM nol to carryforward should be the same.

Customer :

& I should make sure that on the 2009 the NOLs match for both regular carryforward & ATM carryforward, correct?

Customer :

Sorry it was such a hassle! I thought it would be an easy question!

William Ellis, CPA :

Check your 2009 NOL carryforward worksheets to see if the amounts match. They may not which is okay. Keep those worksheets to make sure those amounts flow properly to next year's program. Thanks for your patience. Let me know if you have any other questions. Enjoy the additional $56,000. Thanks, Bill

Customer :

It would be so much easier if I could send you screen shots

Customer :

on the carryforward worksheets there are two columns, one for 2008 & one for 2009. There were zeros for the ATM NOL carryforwards, so I put the same numbers in those two cells as the regular NOL carryforwards for the years. I hope that is okay.

Customer :

Since this took so much of your time can we initiate another question specifying you as the answerer, or can I increase the pmt amt?

Customer :

Or sorry since this is taking so long

Customer :

?On the carryforward worksheets there are two columns, one for 2008 & one for 2009. There were zeros for the ATM NOL carryforwards, so I put the same numbers in those two cells as the regular NOL carryforwars for the years. Is that okay?

William Ellis, CPA :

Don't worry about it. Go out for a nice dinner. Thanks, Bill

William Ellis, CPA :

Well, you could give me some positive feedback. That always helps my ratings. Thanks again, Bill

Customer :

I am on the hold with Proseries about the AMT NOLs not autopopulating. It looks like in the literature that you have to enter those fields themselves. Was I right to enter the same amounts in the AMT NOL as the regular NOL?

William Ellis, CPA :

If everything was entered correctly from your S-Corp's 2008 K-1 to create the NOL, that should be correct. If you have that K-1 available, check the boxes and notes in the additional pages (if available) to see if there are any AMT preference items. After checking this, I'd look at the 2008 NOL calculations again to see if there is an AMT NOL calculation page. Once you've looked for these, you've completed your due diligence.

Customer :

Thank you!

William Ellis, CPA, CPA
Category: Tax
Satisfied Customers: 296
Experience: Over 15 years of experience in public accounting
William Ellis, CPA and 7 other Tax Specialists are ready to help you

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