•1045 Application for Tentative Refund: NOL Carryback for 5 Years

[taxplanet]

How do I generate a form 1045 for a 5 year carryback period under the new covid-19 rules? The form does not recognize more than a three year carryback. 

[Accountant-Man · Accepted solution]

Does the 1045 SAY 3 years, or does it have only 3 columns?

Mine says "___ preceding tax year ended ____________"

It doesn't say 3rd year preceding. Enter 5th, 4th & 3rd.

Then use another F1045 for the 2nd and 1st year preceding, if you need all 5.

[George4Tacks]

@IntuitAustin or @IntuitBettyJo will quickly get these broken links fixed https://proconnect.intuit.com/community/help-articles/help/form-1045-application-for-tentative-refun...

then all will be clear to you. Especially this one. Intuit's primary mission is to be helpful to all users, that is why they have the FAQ's in the software. On very rare occasions, those links get modified and lost. This seems to be one of those. I would love to rewrite what they had there, but they did such a great job I would hate to not do it justice. 

The only hint I will offer at this point is if you are working in the 1040, Screen 60. In the Refund section, there is an Add. That opens up 3 more years for a total of 6 to do the carryback with.  See images

1st 3 years 

Then after clicking Add the next two years

[taxplanet]

Accountan-Man Thank you for the reply.  It is possible to enter the carryback year 5 and 2014 to get the desired result. 

[taxplanet]

Hopefully the links can be fixed.  It is quite frustrating to get into the endless loop promising a message and alas none appears.   The topic, as you can tell,  was copied from a faulty link.   Thanks

[George4Tacks]

@IntuitBettyJo can you help out these poor users that rely on those thingies we used to call a Knowledgebase?

[IntuitBettyJo]

Here's what I could find: 

Spoiler

1045 Application for Tentative Refund NOL Carryback for 5 Years

The Lacerte input screen, like Form 1045, has three columns for prior year tax information. A five-year carryback will require two copies of the form, and two pages of the input sheet.

The order of the columns is critical.
To add five carryback years on Form 1045:

Create columns for each carryback year:

1. In the current tax year, go to Screen 60, Application for Tentative Refund.
2. Enter the data from the prior year's 1040s.  Start in the left column for the oldest year, and work right. (If the current year is 2016, for a five-year carryback, then Left Column = 2011, Center Column = 2012, Right Column = 2013.)  However, when dealing with less than three years, enter the most recent year, the one last affected by the NOL carryback, in the right column. (e.g., if the current year is 2016, and the NOL is being carried back two years, enter 2014 figures in the center column and 2015 figures in the right column.)
3. When all three years have been filled, click the "add" button on the left side of the window to start a new input sheet. In the right column add your next most current year going and the next earliest year in the center column. (Ex.: Center Column = 2014, Right Column = 2015).

Calculate changes in tax (using prior year Lacerte program as a scratchpad):

1. Open Lacerte for the first year of the carryback, (in this example: 2011).
2. On Screen 59, Amended Return (1040X), marking the return as amended.
3. On Screen 15, Net Operating Loss, Enter the Year of Loss, Initial Loss, AMT Initial Loss, Carryover available in 20XX
4. Click on the Forms tab to calculate the return.
5. Print the recalculated 1040 return.  You will need these values for entry in the current year program.
6. Repeat for each carryback year.

Enter the reduced tax numbers for Form 1045:

1. Go to Screen 60, Application for Tentative Refund, in the current year's Lacerte tax program,
2. Using the NOL worksheets that were printed, enter the data in the three columns.
3. In the upper left hand corner, under Refund, click Add.  (The Add button is in the same location as if you were adding a State or a W-2.)
4. Repeat for the remaining two years.

After you add another refund you will start in Column 3 again and work backward.   You will begin by entering the tax year in Step 2.   This will override the programs default year.

Form 1045 can only be completed within 1 calendar year of the initial loss.   If 1 year has passed, each prior year return must be individually amended, carrying forward any loss that cannot be taken to the next year.

Hope this helps! 

-Betty Jo

[208Accountant]

I am doing a 1045 for a loss incurred in 2018 that can now be carried back 5 years with the new CARES Act provisions. The loss will be fully absorbed in the 5th preceding year, 2013. What year of Lacerte would I need to use to generate the 1045? The client was new in 2018, but I have the 2013 return completed by their prior Accountant. This is the first time I have done a 1045, so unfamiliar with the process. 

[George4Tacks]

You typically would create the 1045 in the 2018 Lacerte return, but you will need numbers from the 2013, before and after the carryback.

I would do a down and dirty summary 2013, i.e. one number for all interest, one number for all dividend, if a rental one income and one big deduction number etc to create the bones of the original 1040 for 2013. Copy that then create a after carryback. If have not checked, but you may have to "cheat" for what year the carryback is from. You will be filing all of this by paper, so crossing out an incorrect year and writing in the correct one will be fine. 

1045 is quite a learning process. Print out the instructions for the 1045 and refer to them often.

Good Luck!

[208Accountant]

Thanks George4Tacks! That answered my question! 🙂

[Illni]

Do you open up the tax year you are carrying back to do the 1045 or do you do the 1045 form in the tax module year that the NOL originates from?

[Allen5]

After applying the 2020 NOL carryback, I need to add an additional form 1045.  I am using ProSeries.  

[George4Tacks]

This is an old thread.

For a carryback from 2020 you start with 2020. See my pictures near the beginning of this thread on how to add the two additional years in Lacerte. 

@IntuitBettyJo was apparently able to find something, but we still did not get a fix to the link I pointed out near the beginning of this thread. Here is what she "hid" in her SPOILER

1045 Application for Tentative Refund NOL Carryback for 5 Years

The Lacerte input screen, like Form 1045, has three columns for prior year tax information. A five-year carryback will require two copies of the form, and two pages of the input sheet.

The order of the columns is critical.
To add five carryback years on Form 1045:

Create columns for each carryback year:

1. In the current tax year, go to Screen 60, Application for Tentative Refund.
2. Enter the data from the prior year's 1040s.  Start in the left column for the oldest year, and work right. (If the current year is 2016, for a five-year carryback, then Left Column = 2011, Center Column = 2012, Right Column = 2013.)  However, when dealing with less than three years, enter the most recent year, the one last affected by the NOL carryback, in the right column. (e.g., if the current year is 2016, and the NOL is being carried back two years, enter 2014 figures in the center column and 2015 figures in the right column.)
3. When all three years have been filled, click the "add" button on the left side of the window to start a new input sheet. In the right column add your next most current year going and the next earliest year in the center column. (Ex.: Center Column = 2014, Right Column = 2015).

Calculate changes in tax (using prior year Lacerte program as a scratchpad):

1. Open Lacerte for the first year of the carryback, (in this example: 2011).
2. On Screen 59, Amended Return (1040X), marking the return as amended.
3. On Screen 15, Net Operating Loss, Enter the Year of Loss, Initial Loss, AMT Initial Loss, Carryover available in 20XX
4. Click on the Forms tab to calculate the return.
5. Print the recalculated 1040 return.  You will need these values for entry in the current year program.
6. Repeat for each carryback year.

Enter the reduced tax numbers for Form 1045:

1. Go to Screen 60, Application for Tentative Refund, in the current year's Lacerte tax program,
2. Using the NOL worksheets that were printed, enter the data in the three columns.
3. In the upper left hand corner, under Refund, click Add.  (The Add button is in the same location as if you were adding a State or a W-2.)
4. Repeat for the remaining two years.

After you add another refund you will start in Column 3 again and work backward.   You will begin by entering the tax year in Step 2.   This will override the programs default year.

Form 1045 can only be completed within 1 calendar year of the initial loss.   If 1 year has passed, each prior year return must be individually amended, carrying forward any loss that cannot be taken to the next year.

[mhkdgal]

I have a 2020 NOL that I am going to carryback for 5 years to 2015 and then 2016 (it will be fully used after 2016).  When I attempt to open the 2015 Lacerte program and make a copy of the return to do the amended return (just for calculating the "after carryback' amounts to use on the 2020 form 1045), I get an error message from Lacerte that the NOL year has to be between 1993 and 2018.   I cannot enter the NOL year as 2020.   Am I entering this incorrectly?

[sjrcpa]

No. They haven't updated older years software. Pick a year from that range to enter. Then change it manually on any applicable pages that may be sent in.