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Arthur Rubin
Arthur Rubin, Tax Preparer
Category: Tax
Satisfied Customers: 1561
Experience:  22 years of tax preparation experience, including individual, trust, and estate returns.
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i am carrying back a 2009 NOL (Form 1120) to 2007. My software

Customer Question

i am carrying back a 2009 NOL (Form 1120) to 2007. My software does not free up FTC paid in 2007. Instead, it simply reduces tax to FTC amount & reefunds original tax paid. Can I not get refund of all taxes & then carry back freed up FTC?
Submitted: 7 years ago.
Category: Tax
Expert:  Arthur Rubin replied 7 years ago.
As noted in the instructions for form 1045, per Rev. Rul. 82-154, you need to file an amended return for 2006 to carry back the freed FTC. You may need to file an amended return for reflecting the NOL carryback to 2007, rather than using form 1045.

It appears this does not extend the filing deadline for the amended 2006 return, so that it must be filed by March 15, 2010.

As for how to tell your software to do that, probably the simplest method is to amend your 2007 return by placing your 2009 NOL as a negative entry on the miscellaneous income field of your 2007 return, and then take the resulting carryback on the amended 2007 form 1118 to your 2006 form 1118, if you still have your 2006 and 2007 tax preparation software.

You still need to use the calculations of form 1045 to determine any unused NOL in 2007 to be further carried to 2008.

Edited by Arthur Rubin on 3/3/2010 at 4:01 PM EST