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NOL - 1045 for 2005

I screwed up when reading Pub 536 last year and did not realize form 1045 was something that had to be filed. For some reason I figured it was something to be done internally to determine the NOL for the year and then carry it fwd. As it turns out, I had a NOL of around $40k in 2005. I figured when I did my 2006 taxes, I'd just plug that number in and keep trucking. Now I'm learning I was supposed to file form 1045 along with supporting documentation. I don't need to carryback the loss as I have little to gain in previous years, but I do have much to gain moving forward. For instance, this $40k will reduce my income in 2006 to zero and net me an additional refund of around $3000 higher than if I just walk away from it. I figure for $3000, it's worth it to see how or if I can carry the 2005 NOL forward to 2006. Any ideas or am I SOL on this one? As I understand, the 2005 Form 1045 should have been filed by January 1, 2007. Can I file an amended 2005 return and get around this or am I SOL? I suppose I could just submit the 2006 Form 1045 as if I had submitted the 2005, but I'm thinking that will throw up a flag. I'd prefer to fly above the board. Thanks for any light you can shed!

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Reply to
lifegard2
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See "Waiving the Carryback Period" on page 7, column III of IRS Publication 536.

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If you filed your 2005 return on an extension, pursuant to Treas. Reg. § 301.9100-2, you have until April 17, 2007 to waive the automatic two-year carryback period. If you still qualify to waive the carryback period, you can carryforward your NOL for up to 20 years. If you don't qualify to waive the carryback period, you must file a Form 1040X for each of the carryback years, 2003 and

2004, and apply as much of the NOL to each of those periods as allowable. The remaining NOL then can be carried forward for up to 20 years. Frederick Lorca
Reply to
Frederick Lorca

Form 1045 is used to calculate (and request) your refund on a carryback. For a carryforward, you don't need a 1045, although it may be helpful in calculating the amount of NOL you have. However, you do need to have elected to forgo the carryback.

I believe that the decision to carry back or forward is irrevocable, meaning you may be stuck carrying back if you didn't elect out of it. The default is to carry the loss back.

*google*
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8495,00.html Error: Election to waive carryback period filed late.

Solution: To make the election to carry an NOL and ATNOL forward without first carrying it back, the election must have been made with the original loss year return, or filed with a Form 1040X within six months of the original due date (excluding extensions) of the loss year return. If the election was not timely made, the NOL must be carried back before being carried forward. Remember to attach a copy of the timely election to the return where the NOL is carried forward. Phoebe :)

Reply to
Phoebe Roberts, EA

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