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Common questions about corporate net operating loss (NOL) in Lacerte

by Intuit• Updated 5 months ago

For most taxpayers, NOLs arising in tax years ending after 2020 can only be carried forward. See Net operating losses for more information.

Follow these steps to enter an NOL carryover in the Corporate module:

Go to Screen 23, Net Operating Losses.
Scroll down to the Net Operating Loss Carryovers section.
Under the Net Operating Loss column, enter the amount in the field for the year the loss was incurred.
Repeat step 3 for each year a loss was incurred.
Hold down Ctrl+E in the year the NOL was incurred in the Utilizations (enter year and amount) column.
- You need to enter utilizations in the same year they were incurred for Lacerte to correctly calculate the NOL carryover for the current year.
Enter the amount utilized in the Amount column.
Enter the year the amount was actually used in the Description column.
Repeat steps 5–7 for each utilization.

The information you enter will print on a statement on Form 1120, line 29a and reflect any amount of NOL available to be used in the current year. Any current NOL carryover and utilization will proforma to the next tax year.

How do I elect to forego the carryback period for a net operating loss?

For most taxpayers, NOLs arising in tax years ending after 2020 can only be carried forward. See Net operating losses for more information.

Go to Screen 23.1, Regular NOL Deduction.
Check the Forego carryback of 20XX NOL box.
- The corporation must have a current year NOL for Schedule K, Line 11 to check.

The program will include the NOL carryover in General Information and proforma the NOL carryover to the next tax year. Lacerte will also check the box on Form 1120, Schedule K, line 11.

If you also need to generate an election statement, make entries on Screen 41, Elections.

Why are corporate charitable contributions converting to a NOL carryover?

Charitable contributions are calculated with a modified taxable income and don’t factor in the amount of net operating loss (NOL) carryover. If you carry over contributions during a year with taxable income, your contributions will be used against the income first (up to the 10% adjusted gross income (AGI) limitation). The carried-over NOL is then applied against the remaining modified taxable income.

While it may seem like your contributions are converting to NOL, what’s really happening is your contributions are utilized before the NOL. Any remaining NOL that couldn’t be fully utilized in the current year will then carry over.

Lacerte Tax

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