Is it better for a C Corp to have a Sec 179 carryover or a NOL carryforward?

Forum|Forum|6 years ago
December 7, 2019
10 replies
62 views

Company has profit this year but purchased more assets than it can take as a Sec 179 deduction in 2018 so I took bonus depreciation that created a NOL. Since NOLs now can only be carryfwd and only can use 80% in a future year with the remaining 20% carryfwd until used up I don't know if I should just forget about a lot of the bonus depreciation and take all Sec 179 and have that as a big carryfwd. What should I do - carryfwd a large Sec 179 or take bonus depr. and carryfwd a big NOL?

ProSeries Professional

This topic has been closed for replies.

Best answer by rbynaker

I might recommend they file an extension and deal with this in September. After 8-9 months of activity they might have a better idea about how 2019 might look. There's no "one size fits all" answer.

taxiowa

Level 8

Does client expect a large business income next year? Then it is more prudent to carryforward 179 so that it offsets SE tax next year. However I know the standard deduction does not carryforward. So maybe client should be showing income of 12K to be offset by standard deduction. Although you don't give many details of what type of return and any other income taxpayer has.

E

elintxAuthor

Level 3

This is for a C Corporation.

E

elintxAuthor

Level 3

Will the price of oil be higher this year (they manufacture parts for O&G industry)? Will the client purchase a lot of fixed assets this year? I asked and they don't know so really can't say what kind of income or expenses they will have.

rbynakerAnswer

Level 13

I might recommend they file an extension and deal with this in September. After 8-9 months of activity they might have a better idea about how 2019 might look. There's no "one size fits all" answer.

itonewbie

Level 15

---------------------------------------------------------------------------------Still an AllStar

Sign up

Login with SSO

Let's get you signed in

Login with SSO