Question

NOL for 2020 in NY state and federal

Forum|Forum|4 years ago
January 19, 2022
1 reply
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I am working on the amendment to my federal and NY state returns for 2020

The AIG is $16,097. TurboTax calculated NOL as the same amount. Since I missed deadline for carryforward/carryback, I assume that I should file amendment to 2015 federal return.

Since NY does not follow CARES Act, I am filing IT-558 decoupling form. I am reading the following:

"Your recomputed federal NOL deduction is the amount that your federal NOL deduction would have been if computed using the rules in place prior to any changes made to the IRC after March 1, 2020. For example:
- your federal NOL deduction for losses incurred in tax year 2018 or later is limited to 80% of your current year federal taxable income (computed as if the changes to the IRC after March 1, 2020, did not occur)"

How would I recompute federal NOL deduction? Should I multiply $-16,097 by 80%, which comes to $-12,877? Or, since the taxable income is negative just put 0?

Thank you

T

ThomasM125

I'm not sure from your post what your federal taxable income was. That would be the amount on line 15 of your form 1040. To that number, you would have to add back any net operating loss (NOL), as entered on line 8 of schedule 1. That would give you your taxable income before the NOL deduction, and you would multiply that amount by 80% to get the NOL deduction allowed for the state.

I assume you have positive taxable income, so that would give you a number for the NOL deduction. If you had no taxable income or it was negative, then you would have no NOL deduction for the current year.

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S

StatenIslandAuthor

Thank you for the quick response.

I assume that my taxable income for 2020 was negative, as the major positive portion of my total income was Social Security Benefits. I had a huge loss on my rental property.

Line 15 on 1040 is zero. But I am a little confused about line 8 of schedule 1. Schedule 1 (Additional income and Adjustments to Income) line 8 "Other income. List type and amount" is empty. I do have $-19,992 on the line 5 (Rental real estate, royalties, partnerships, S corporations etc.). Also I do not see NOL anywhere on schedule 1

T

ThomasM125

The net operating loss deduction for the current year would show up as a negative amount on line 8 of schedule 1, it is part of "Other Income." It would only occur if you had a NOL from another year carried over to it. If you have a NOL in the current year, it will be deducted in other years. Since you have no taxable income this year, you have no NOL deduction this year.

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