Question

with 475f MTM selection in 2021, can you carry back loss made in 2021 to previous year 2020 but no 475f selection in 2020

Forum|Forum|4 years ago
April 5, 2022
1 reply
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Here is the scenario:

A trader (qualify for trader status) had capital gain in 2020 but did not make 475f selection in 2020, he/she made 475f selection by 4/15/2021, but suffered a capital loss in 2021, can he/she carry the loss made in 2021 back to 2020? If so how he/she use TurboTax to amend 2020 tax return to show loss in 2021 carried back?

In addition, can he/she carry remaining loss forward to 2022? It seems that you can only carry 80% NOL of your Taxable income. in this scenario, theTaxable Income is negative, does it means you cannot carry forward your loss?

Thanks a lot for kind help.

Lucy

ColeenD3

No. Every tax year is separate. While capital losses are limited and you are required to carry them forward, this is an isolated example.

L

Lucy196Author

Hi ColeenD3,

Thanks for kind reply. However, I am referring ordinary gain/loss here, not capital gain/loss.

Because I made 475f MTM selection in 2021, the capital gain/loss in 2021 become ordinary gain/loss.

my question is that can I carry this ordinary loss made in 2021 (no longer considered as capital loss for tax purpose due to 475f selection) back to 2020 (in 2020, did not make 475f selection )?

Thanks in advance for help,

Lucy