Client has $7000 in wages and a $18000 loss on his rental properties. Can he show a NOL of $11000 and carry it back?
- posted
13 years ago
Client has $7000 in wages and a $18000 loss on his rental properties. Can he show a NOL of $11000 and carry it back?
Rentals can generate NOL's, if that's what you're asking. I assume the $18K falls under the special up-to-$25K passive loss allowance?
-Mark Bole
Yes is falls under the special $25K passive loss allowance. So, if the taxpaper does create this NOL in the 2010 tax year, he can file an amended return to decrease his 2008 taxable income by $18,000? His original taxable income in 2008 was $31000.
I think so, unless there is some odd interaction between NOL and passive loss -- I haven't researched it.
Carrying back the NOL and then re-calculating the affected returns going forward is not the simplest thing to do, and as I haven't prepared any returns lately with NOL carryback, I don't have any more specific advice
-- maybe someone else will chime in?
-Mark Bole
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