2018 NOL Absorbtion in 2019

[bjashcpa]

I have a 2018 NOL Carryforward to 2019.  I am getting a Critical Diagnostic: "The program doesn't automate the limitation of post-2017 net operating losses to 80% of taxable income before taking into account any NOL deduction.  You must override the amount of post-2017 NOL Carryforward absorbed this year so it does not exceed the 80% of taxable income limit."  Are you kidding me?  Why do I pay the big bucks for this software???  Then when I try to do it manually in screen 15, it also changes the 1040, etc., not just the carryforward!  Is Lacerte working on this?  Has anyone else come up with a work around for this? 

[nanhopkins]

I have called them twice in the last two days regarding this.  We noticed once we manually reduced the 2018 NOL to the 80% of taxable income, our client still had $13,000 of taxable income on line 11.  However, there is no tax showing on line 12a, page 2.  The two Lacerte technical support persons we talked to could not seem to understand what I was trying to tell them.

We think the system is not reducing the 2018 NOL when calculating the income tax and still thinks it is zero taxable income, which it would be if the 2018 NOL was not limited.

Very frustrating and I am with you on why do we pay this much for Lacerte and have to manually calculate something so obvious.

[bjashcpa]

Yes it is more than frustrating!  I am 1 of 8 CPA's who have a group discussion/emails, etc. over the year and I am the only one still using Lacerte, they are using Ultra Tax.  I used to think they were wrong, well I am beginning to think differently with this issue!  I have talked with them and they aren't having to manually calculate this!  Isn't that why we use software?!  They also have access to all of the Form 8995-A and the related schedules!  We still don't! 

Vent over!  If I find out anything I will let you know, please do the same.  Thanks!  

[Kim W]

I can input the 80% of 2018 NOL and it is calculating tax.  How do you get it to recognize the NOL carry over to 2020.  Prior to the limitation I had a carry over but after I limit it I don't have a carryover.

[lindavail]

I had the same question.   So are they going to calculate it?  We pay a lot of money for Lacerte.  I emailed them at the beginning of the week, but still no answer. 

[rjskal]

This is one of several significant problems with this year's program.  It's ridiculous!  I presume we'll have to manually adjust QBI for post TCJA Section 179, as well!

[bjashcpa]

This is unbelievable!  It is just creating more work now and forcing us to rethink our software choice!

[abctax55]

@IntuitAustin 

Morning....  this is another issue that Intuit *really* needs to provide some information on; such as WHY doesn't this costly software do this computation?

This thread is a week old - and nothing from the PTB?

I am just now getting into returns with this issue, and just now am finding out that Lacerte isn't doing this computation.

[IntuitAustin]

Right now the program is unable to automatically calculate this because it's a circular calculation. You need taxable income without regard to the NOL in order to compute what the limited NOL amount is, which in turn changes taxable income once you apply the limited NOL to other income. So since it's a circular calculation, it needs human intervention. The diagnostic was created to let you know how to manually adjust it. The diagnostic offers the following resolution:

The program doesn't automate the limitation of post-2017 net operating losses to 80% of taxable income, before taking into account any NOL deduction. You must override the amount of post-2017 NOL carryforward absorbed this year so it does not exceed the 80% of taxable income limit.

---

I'm submitting an enhancement request to our development team about this, as of right now though, the program requires the override. 

[abctax55]

...Ultra Tax.  I used to think they were wrong, well I am beginning to think differently with this issue!  I have talked with them and they aren't having to manually calculate this!

Yet other software *does* do the calculation?

[rbynaker]

I think we just need to wait until someone invents algebra.

[BWaugh]

How do you manually override though?  I have a return, with NOL from 2015-2018.  In 2019 he is showing a profit.  I got the diagnostic about the 80% limitation, but when I put 8-% of his profit it, nothing happens and I still get the diagnostic. 

[abctax55]

Stardate March 2020:

https://proconnect.intuit.com/community/lacerte-discussions/discussion/where-do-you-overide-the-nol-...

[SItaxguy]

This has turned a 45 minute Missouri taxpayer's return into several hours trying to figure out whether MO could actually be requiring an add back of all NOL carry forwards. I am really having my doubts about Lacerte's commitment to professional software this year!

[sjrcpa]

@rbynakerRick, I just saw this. I laughed so hard I spit out my drink.

[rbynaker]

Oh no, I hope it wasn't the good tequila!

[abctax55]

I'm very sure Susan doesn't *do* anything but the good tequila 😉

[rbynaker]

Ironically it sounds like Lacerte figured out this whole NOL thing just in time for the law to change.

[sjrcpa]

No, just water.

EDIT: At the time I was working (from home) so it was a little early for alcohol. I have since had the good tequila.

[abctax55]

It is *always* happy hour somewhere 🍷🍺.  That's especially true during these times.

[SItaxguy]

My client needed to show no absorbsion, so I put in -1 as indicated in the screen. That completely removed the NOL carry over into the 2019 tax return for the 2018 NOL and left the full amount as an add back in the MO return. The only way to make it work was take out the -1. Then it did work. I have no idea how it could be made to work correctly had their been any absorbtion of the 2018 NOL.  In other words, your fix is wrong. It does not work.

[abctax55]

In other words, your fix is wrong. It does not work.

1) why the underline - we get your point.

2) the *fix* likely worked when it was originally posted.  BEFORE the programming was changed.   Intuit changed the software to match the laws.  Then the laws changed, retroactively, about ten days ago.

[SItaxguy]

I don't know why it underlined. It noticed it was underling as I typed and I just did not change it. No emphasis intended. Just a touch insane at the moment. Be warned though, if you put a -1 in, the program will completely omit the NOL on schedule 1, but will add it back on Missouri.  What they intended for this to do, does not work. 

[TTI Diana]

Is Ultra Tax priced similar to Lacerte?