Question about Self-Employed NOL

I have several questions about what to do with a NOL for a self-employed individual. First, an election to waive the carry back was not filed. The NOL was created in 2004. So carry backs must first go to 2002, then 2003 and so on. In

2002, I owed no FIT, but did owe self-employment taxes. If no FIT was due in 2002, but the AGI was positive, do I have to use the NOL to bring the AGI to -0- in 2002? Additionally, does a form 1045 need to be filed as long as there is a NOL balance carried forward (as in filing a Sch. D for Capital losses carried forward in years there were no capital gains?) Hope that was partly clear and TIA.

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- Buddy

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Reply to
Buddy
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An nol carryback will not get you any se tax paid. Only income tax paid can be refunded on a carryback. If there is no income to carry back to, then you carry forward. Be sure to document your file, if this is the case.

-- This written advice was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. (The foregoing legend has been affixed pursuant to U.S. Treasury Regulations governing tax practice.)

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Reply to
Benjamin Yazersky CPA

Thanks Ben, upon review of the actual facts, what should this person file in 2005 assuming the following:

  1. NOL of (,963) in 2004 carry back 2 years, the following occur on form 1040:
  2. 2002 - ln. 41 20 - taxable income, tax - 3, ln. 50 3 Child Tax Credit - so FIT payable = 1. NOL of ($16,963) in 2004 carry back 2 years, the following occur on form 1040: 2. 2002 - ln. 41 $4520 - taxable income, tax - $453, ln. 50 $453 Child Tax Credit - so FIT payable = $0 3. 2003 - ln. 40 $0 - taxable income
  3. 2003 - ln. 40 1. NOL of ($16,963) in 2004 carry back 2 years, the following occur on form 1040: 2. 2002 - ln. 41 $4520 - taxable income, tax - $453, ln. 50 $453 Child Tax Credit - so FIT payable = $0 3. 2003 - ln. 40 $0 - taxable income - taxable income

  1. 2005 - ln. 43 4. 2005 - ln. 43 $0 - taxable income

    - taxable income

In 2005, must a 1045 be filed using $4520 of the NOL? In 2006, assuming $0 taxable income again, does a 1045 need to be filed just to keep the NOL in play? Thanks again for the help.

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- Buddy

Reply to
Buddy

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