| Author |
Message |
Guest
|
 Posted:
Tue Oct 18, 2005 1:34 pm Post subject:
Proper way to waive right to NOL carryback? |
|
|
I want to waive my right to carry back a net operating loss
(NOL). From what I've read, the only thing I need to do is
attach a statement to that effect to my return. Something
like this:
------------------------------------------------------------
Please note:
I am electing, under section 172(b)(3) of the
Internal Revenue Code, to relinquish the entire
carryback period for any 2004 NOL (net operating
loss).
Sincerely,
Harry Lewis [signature]
Harry Lewis
------------------------------------------------------------
Will that do? Or is there some better wording that I should
use instead?
And where should I attach this? Just type it up on a sheet
of paper and put it as the last page of the return?
Your help would be greatly appreciated.
Harry
P.S. I think that covers everything, but feel free to let
me know if I've overlooked anything. :-)
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
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<< Copyright (2005) - All rights reserved. >>
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Harlan Lunsford
Guest
|
| Posted:
Wed Oct 19, 2005 8:00 am Post subject:
Re: Proper way to waive right to NOL carryback? |
|
|
harry_lewis@yahoo.com wrote:
| Quote: | I want to waive my right to carry back a net operating loss
(NOL). From what I've read, the only thing I need to do is
attach a statement to that effect to my return. Something
like this:
------------------------------------------------------------
Please note:
I am electing, under section 172(b)(3) of the
Internal Revenue Code, to relinquish the entire
carryback period for any 2004 NOL (net operating
loss).
Sincerely,
Harry Lewis [signature]
Harry Lewis
------------------------------------------------------------
Will that do? Or is there some better wording that I should
use instead?
And where should I attach this? Just type it up on a sheet
of paper and put it as the last page of the return?
|
Okay now, why would you want to do that? I mean, give up
a possible tax benefit?
Most cases I see are similar but involving electing to carry
FORWARD the loss versus the usual carry back. And the
reason for this is because one expects to be in a higher tax
bracket in future years, or may have had no taxable income
in earlier years.
To do this, one would attach an election (separate page)
saying this, in effect that (1) waive the carryback and (2)
elect to carry forward the loss. For if you leave out
(2), THEIRS (The IRS) could simply deny it.
ChEAr$,
Harlan Lunsford, EA n LA
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
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Guest
|
| Posted:
Thu Oct 20, 2005 8:00 am Post subject:
Re: Proper way to waive right to NOL carryback? |
|
|
Harlan Lunsford wrote:
| Quote: | harry_lewis@yahoo.com wrote:
I want to waive my right to carry back a net operating loss
(NOL). From what I've read, the only thing I need to do is
attach a statement to that effect to my return. Something
like this:
------------------------------------------------------------
Please note:
I am electing, under section 172(b)(3) of the
Internal Revenue Code, to relinquish the entire
carryback period for any 2004 NOL (net operating
loss).
Sincerely,
Harry Lewis [signature]
Harry Lewis
------------------------------------------------------------
Will that do? Or is there some better wording that I should
use instead?
And where should I attach this? Just type it up on a sheet
of paper and put it as the last page of the return?
Okay now, why would you want to do that? I mean, give up
a possible tax benefit?
Most cases I see are similar but involving electing to carry
FORWARD the loss versus the usual carry back. And the
reason for this is because one expects to be in a higher tax
bracket in future years, or may have had no taxable income
in earlier years.
To do this, one would attach an election (separate page)
saying this, in effect that (1) waive the carryback and (2)
elect to carry forward the loss. For if you leave out
(2), THEIRS (The IRS) could simply deny it.
|
Sorry for the long-winded disagreement, but in the interest
of being clear . . .
All you need to do is number (1) above. By waiving the
carryback you are by default "electing" to carryforward.
Nowhere in the Code or Regs does it say a taxpayer has to
elect to carryforward an NOL.
Per the ordering rules in Regs. =A71.172-4:
BEGIN CITE
(b) Portion of net operating loss which is a carryback or a
carryover to the taxable year in issue.
(1) A net operating loss shall first be carried to the
earliest of the several taxable years for which such loss is
allowable as a carryback or a carryover, and shall then be
carried to the next earliest of such several taxable years,
etc. Except as provided in =A71.172-9, the entire net
operating loss shall be carried back to such earliest year.
END CITE
Therefore, if a taxpayer elects to waive the carryback, then
the earliest year that the NOL can be carried to is the year
subsequent to the year that generated the NOL; i.e., a
carryforward.
Look at the corporate analog; i.e., checking the box on
Schedule K of Form 1120. "If the corporation has an NOL for
the tax year and is electing to forego the carryback period,
check here." Nothing at all about electing to carryforward.
(Under the 1502 regulations a taxpayer filing a
consolidated tax return must not only check the box, but
must also add a statement that the consolidated group is
foregoing the carryback. Again, though, the *specific
language mandated in the regulations* does not call for the
(corporate parent) taxpayer to elect to carryforward the
NOL.)
Peter C. Gatto, CPA
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >>
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Harlan Lunsford
Guest
|
| Posted:
Thu Oct 20, 2005 9:07 pm Post subject:
Re: Proper way to waive right to NOL carryback? |
|
|
pgattocpa@excite.com wrote:
| Quote: | Harlan Lunsford wrote:
harry_lewis@yahoo.com wrote:
I want to waive my right to carry back a net operating loss
(NOL). From what I've read, the only thing I need to do is
attach a statement to that effect to my return. Something
like this:
------------------------------------------------------------
Please note:
I am electing, under section 172(b)(3) of the
Internal Revenue Code, to relinquish the entire
carryback period for any 2004 NOL (net operating
loss).
Sincerely,
Harry Lewis [signature]
Harry Lewis
------------------------------------------------------------
Will that do? Or is there some better wording that I should
use instead?
And where should I attach this? Just type it up on a sheet
of paper and put it as the last page of the return?
Okay now, why would you want to do that? I mean, give up
a possible tax benefit?
Most cases I see are similar but involving electing to carry
FORWARD the loss versus the usual carry back. And the
reason for this is because one expects to be in a higher tax
bracket in future years, or may have had no taxable income
in earlier years.
To do this, one would attach an election (separate page)
saying this, in effect that (1) waive the carryback and (2)
elect to carry forward the loss. For if you leave out
(2), THEIRS (The IRS) could simply deny it.
Sorry for the long-winded disagreement, but in the interest
of being clear . . .
All you need to do is number (1) above. By waiving the
carryback you are by default "electing" to carryforward.
Nowhere in the Code or Regs does it say a taxpayer has to
elect to carryforward an NOL.
|
(snipped sections of message)
Granted, But it never hurts to be absolutely clear about
what you're doing. Remember who we're dealing with here.
the IRS.
ChEAr$,
Harlan Lunsford, EA n LA
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
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Bob Sandler
Guest
|
| Posted:
Fri Oct 21, 2005 8:00 am Post subject:
Re: Proper way to waive right to NOL carryback? |
|
|
| Quote: | I want to waive my right to carry back a net operating loss
(NOL). From what I've read, the only thing I need to do is
attach a statement to that effect to my return. Something
like this:
------------------------------------------------------------
Please note:
I am electing, under section 172(b)(3) of the
Internal Revenue Code, to relinquish the entire
carryback period for any 2004 NOL (net operating
loss).
Sincerely,
Harry Lewis [signature]
Harry Lewis
------------------------------------------------------------
Will that do? Or is there some better wording that I should
use instead?
|
FWIW, TurboTax generates a statement that says the
following.
Election To Forego the Carryback Period for Net Operating
Loss
Pursuant to the Internal Revenue Code, Section 172(b)(3),
the taxpayer, Harry Lewis, irrevocably elects to relinquish
the entire carryback period with respect to the net
operating loss incurred for the taxable year ended
12/31/2004.
| Quote: | And where should I attach this? Just type it up on a sheet
of paper and put it as the last page of the return?
|
Yes, attach it at the end, after all the standard forms and
schedules.
Be sure to put your name and social security number at the
top of the page.
Bob Sandler
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
|
| Back to top |
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|
Lanny K Williams CPA
Guest
|
| Posted:
Fri Oct 21, 2005 8:00 am Post subject:
Re: Proper way to waive right to NOL carryback? |
|
|
Harlan Lunsford wrote:
| Quote: | Okay now, why would you want to do that? I mean, give up
a possible tax benefit?
|
Why? Because the taxpayer had too little income in the
carryback years.
In my years of tax practice, I've advised clients to forego
the carryback numerous times. My current software even has
an option to include the appropriate statement in the
return, it is so common.
Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
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Harlan Lunsford
Guest
|
| Posted:
Sat Oct 22, 2005 5:22 am Post subject:
Re: Proper way to waive right to NOL carryback? |
|
|
Lanny K Williams CPA wrote:
| Quote: | Harlan Lunsford wrote:
Okay now, why would you want to do that? I mean, give up
a possible tax benefit?
Why? Because the taxpayer had too little income in the
carryback years.
In my years of tax practice, I've advised clients to forego
the carryback numerous times. My current software even has
an option to include the appropriate statement in the
return, it is so common.
|
Gee, Larry, when I said that, I guess I forgot to "wink"!
if you know what I mean.
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
|
| Back to top |
|
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Guest
|
| Posted:
Mon Oct 24, 2005 8:00 am Post subject:
Re: Proper way to waive right to NOL carryback? |
|
|
Thanks for all the replies to my question. The reason I
asked about this is because my income was relatively low the
last few years, and I expect it to be much higher in the
future. Also, not bothering with carrying back the NOL
simplifies matters, and I like simplicity.
Harry
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
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