Form 3461 - Instructions says – Line 16:
If in the subsequent year, the taxpayer has enough business income for the year to fully offset all of the excess bus loss carryover, then the carryover balance is applied to offset the business income and there is no limitation to calculate. If there is a business income in the subsequent year but not enough to fully offset all of the excess business loss carryover, then any remaining balance will continue to carryover to futures years.
Year 2 (Subsequent year): I did the calculation on form 3461 and find that I have NO excess bus loss carry forward. The instructions do not say where on the tax return to deduct the loss. Where do I deduct it ? On Sch CA we have line 8 (o) which cannot used per instructions and this line is shaded out for “subtraction” col B. I called Lacerte and spoke to the high-level programmer but he said since instructions are silent, Lacerte will not take a position. He said to Call FTB.
Per Lacerte, Sch CA there is Line 8 (z) Column B (subtractions) which could be used for adjustment if we like, but they do not back it up. Should I deduct it here???
My concern is that the NOL for CA are suspended since this taxpayer has more than $1m in business income. So, if I take the “excess bus loss deduction” to reduce income, is it ok ? Based on the instructions, it does not look that Form 3461 and Form 3805V (Ca NOL) are connected.
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