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Business vs. non-business items for NOL calculation

I'm putting together a web based NOL calculator, and I'm having some difficulty determining whether certain items are business or non-business. The items that I'm having problems with are jury duty , not for profit activities, prizes and awards, incentive stock options for AMT, income from limited partnerships and passive activities, and Real Estate Mortgage Investment Conduits. I think that I've read that jury pay, not for profit activities, and prizes and awards are non-business items. I'm going to guess that ISOs (under AMT) are considered to be business. My reasoning for this is that the ISO is payment for work. And it just occurred to me that a similar argument would apply to the ordinary income component of an ESPP. As for the other items, they seem more like investment activities than business. Any thoughts?

Reply to
SD
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All personal I think.

Is there a K-1? Yes, a loss from this can lead to an NOL. However, a loss from a passive activity is not allowed but is instead carried forward.

No idea what the above is.

Reply to
remove ps

Let me add one more item to the list. Unrecaptured 1250 gain; even though it appears on schedule D, is it really a "capital" gain?

Reply to
SD

Sure it's capital gain. It has a different maximum tax rate than capital gain on sale of stock, and there's an even different maximum capital gain tax rate on collectibles.

Reply to
Arthur Kamlet

All personal I think.

Is there a K-1? Yes, a loss from this can lead to an NOL. However, a loss from a passive activity is not allowed but is instead carried forward.

No idea what the above is.

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Jury-duty items: I would put the jury-duty pay deduction as a business deduction. The point of surrendering it to one's employer is to get one's regular pay (usually higher). If one is considering jury-duty pay INCOME, it is considered wages from "employment" and thus also on the business side.

Not for profit activities: Non-business, by operation of Section 183.

Prizes and awards: Depends if they were job related.

Incentive stock options: Business - as deferred wage income.

Passive activities: The passthrough character generally governs. Note: A suspended PAL upon release from a FULL disposition of the activity can be an NOL generator.

I don't deal with REMICs.

Reply to
D. Stussy

I classified it as non-business, but you make a good point - I'll change the program.

I Got that one right.

What about a job related prizes or awards that are not taxable, would you still classify it as business?

I guessed correctly on that one.

Let's say that you do not materially participate in a partnership, and the partnership has passive income; how would you classify it. If non-business, then would material participation change anything?

Do you have an opinion on unrecaptured 1250 gain - is it really a capital gain?

Reply to
SD

Be sure you have figured AMT NOL separately from regular tax NOL.

Reply to
Arthur Kamlet

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