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Can a Nonresident of New York with a net operating loss for

Resolved Question:

Can a Nonresident individual of New York with a net operating loss for both Federal and New York purposes make an election to forgo the carryback period in New York while carrying back the Federal NOL? This is under the New York state tax law.
Submitted: 3 years ago.
Category: Tax
Expert:  CGCPA replied 3 years ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

 

The NY State tax returns (all series - resident, part year resident, and non resident) begin with the Federal income/loss information. Thus the amounts reported to NY must match the amounts reported to the IRS through the Adjusted Gross Income line. In this area NY is in conformity with the IRS tax codes. Differences only appear later in the return. There is no option to treat a NY NOL differently from the Federal. Thus, if you do treat this area differently, the NYS Department of Taxation and Finance will either adjust (or as they see it, correct) the return or place it immediately for audit. In simple terms the choice you seek is not available in the way you seek it. If you chose to forgo the carry back by not filing amended NY returns they will not object but you will must then reduce any carry forward to match the Federal.

Customer: replied 3 years ago.
I can understand your answer for a resident, but for a nonresident it seems a bit odd. For example, there is a ruling by NY that in the case where there is no Federal NOL, but there is a NY NOL, the NOL election is available to the taxpayer. Further, the nonresident tax calculation is not based on Federal income, but NY source income or loss. So it seems strange that any NY NOL treatment would be tied to the Federal.
Expert:  CGCPA replied 3 years ago.
I agree with you. However, NY does not permit what you are seeking and instead requires the same treatment followed by an adjustment to reflect only the NY NOL.
Expert:  CGCPA replied 3 years ago.

The following is extracted from the NYS form IT-203 instructions. It does specifically state that the NOL must be calculated the same way as the Federal NOL with only adjustments for Non NY items. These instructions can be read at http://www.nystax.gov/ Click the forms and instructions tab and go to the instructions for form IT-203. It is covered on page 59.

 

New York State net operating loss

Nonresident

The New York State net operating loss (NOL) to be included

in the New York State amount column of a nonresident's

Form IT‑203 must be computed in the same manner as the

corresponding federal deduction, but using only New York State

items of income, gain, loss, and deduction in the computation.

New York State modifications are not included in the

computation of the NOL or in determining the amount of loss to

be used in the carryback or carryover year.

I realize this may not be to your best interest but I can only provide the rules. Unfortunately, I do not ,make those rules.

CGCPA, CPA
Category: Tax
Satisfied Customers: 3742
Experience: over 40 years experience in tax matters
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