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Handling Restricted NOLs in Business returns in SureFire

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📊 Step-by-Step Guide

Step 1: Go to the correct line and worksheet

Use this when you need to locate where the NOL carryover information is handled.

Go to line 29 of the 1120 Pg 1, link to the Current-Year NOL Carryover Worksheet.

Step 2: Complete the correct parts based on whether it is the first year

Use this when you need to know which lines to fill in for the current year.

If this is the first year, complete Part I, lines B and C. If this is not the first year, complete lines B, C, and possibly D2.

Step 3: Complete the Current Year NOL Carryover Worksheet

Use this when you need to enter the restricted NOL carryover percentage.

Complete the Current Year NOL Carryover Worksheet with the percentage, which is to be used each following year.

Step 4: Add and complete the Election Explanations form

Use this when you need to explain why the NOL is restricted and how the percent was determined.

Complete an Election Explanations form, stating why it is a restricted NOL and how the percent was reached.

In order to add the Election Explanations form, select the Add/Display Forms List tab. Type election in the Look For box. Next, open the Election and Regulation Explanations and enter the information. This will check the form off in the Form Tree and be included in the e-file.

Step 5: Repeat the Election and Regulation Explanations each year

Use this when the restricted loss continues to carry forward into future years.

Complete the Election and Regulation Explanations form each year that the restricted loss carries forward.

Tags: federal,form