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BK-CPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 933
Experience:  Owner of a CPA firm
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I'm ***** *****. My wife and I, joint return filers, had a

Customer Question

I'm ***** ***** Mason. My wife and I, joint return filers, had a large S-Corp NOL. I'm working on completing Form 1045. For the 2nd preceding year; I completed the Before Carryback column and went on to the After Carryback column. I have completed Schedule B and have adjusted for the modified Adj Gross Inc, deductions, and have removed the exemptions. I calculated the new taxable income after carryback. How do I apply the NOL carryback to the new adjusted Taxable income? I will have a substantial carryover after applying the new taxable income to the NOL.
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Submitted: 1 year ago.
Category: Tax
Expert:  BK-CPA replied 1 year ago.

Hello and thank you for your question.

I don't know what you're asking when you say "how do I apply the NOL carryback to the new adjusted taxable income?"

To get through this, I suggest you load your prior year returns into tax software if you haven't yet. Start with the earliest of your carryback years (ie, 2013 if this is a NOL originating in 2015). Complete the "before carryback" column on Form 1045. Then, record the carryback NOL in your tax software for 2013 and let everything recalculate. It will compile all the information you need to complete Form 1045. Fill in all the information for 2013 on your Form 1045. Proceed by loading your 2014 return into software. Again, complete the "before carryback" column for 2014. Then, enter the remaining NOL carried forward from 2013 to 2014 into your software and let it compute everything for the after-carryback column of Form 1045 and for Schedule B. That is the easiest way to do this. Note that if you are filing within one year you don't have to use Form 1040X, but you can also file that way if you like where Form 1040X can easily be populated using this method as well (just indicate that you are amending after loading your original return each year and prior to entering the NOL). This method will also allow you to compute the State returns which you will likely be able to amend for a refund as well.

I trust this will work for you... Good luck!