Question on Business Loss:

Jan 27, 2009 4 Replies
K

Question on Business Loss:



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I have a small service business that has been profitable for the past few years. However, with the economy the way it is, I may have a loss this year.



I have 2 questions:


  1. Can I carry this loss backwards to past years and set off against past years profits ? If so, how should I go about doing this ?


  1. If the above is not possible.. How can I carry forward this loss to future years and set off against future years profits? If so, how can I do it ? Any forms to fill ?


Please let me know.



Thanks, Kim


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R

The term in question is "Net Operating Loss" or "NOL". Google for it. Basically, you can carry losses back 2 years and forward 20 years. In some cases, you can carryback 3, 5, or 10 years.

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K

Your net operating loss (NOL) available for carryback or carryforward is calculated on Form 1045. It is not just the loss on your Schedule C; that loss will be reduced to the extent it is offset by other income.

You may want to get professional help with your 2009 taxes.

Katie in San Diego

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S

One additional point, the OP did not say whether or not this business is a corporation. That shifts things around a little.

Steve

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A

Steve Pope wrote: [snip]

He didn't even say he had an NOL. He merely said he had a business that was at a loss.

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