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RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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I lost 1 mill0n in buss Whent back and got two years retur

Resolved Question:

I lost 1 mill0n in buss Whent back and got two years returns
Submitted: 8 years ago.
Category: Tax
Expert:  RD replied 8 years ago.

Can you please clarify your question?

 

Did you file your tax return and carried back your net operating loss and got a refund?

Customer: replied 8 years ago.
yes I got two years of refund but still have 500.000 to go forward How is that treated?
Expert:  RD replied 8 years ago.

This NOL will be carried forward and used in future years against your income. So you will get the benefit of this NOL in future years.

 

Generally you must carry back the entire amount of the NOL to the 2 tax years before the NOL year (the carryback period), and then carry forward any remaining NOL for up to 20 years after the NOL year (the carryforward period).

 

Cashing in IRA will result in early withdrawal penalty of 10% if you are under 59 1/2 years. You may not owe any income tax as you could use your NOL but the penalty amount will apply.

 

Let me know if you have any question.

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

Customer: replied 8 years ago.
How is the remaining lost treated as I go forward
Expert:  RD replied 8 years ago.

It will be treated as Net Operating Loss.

 

The carry forward of your NOL to a tax year after the NOL year, will be listed as a negative figure on the Other income line of Form 1040 (line 21).

 

You must attach a statement that shows all the important facts about the NOL. Your statement should include a computation showing how you figured the NOL deduction.

 

 

Let me know if you have any question.

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

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