NOL Statute of Limitations and Carryback Procedure

[North Atlantic]

New York State

I am filing all my IRS back taxes starting in TY 2012. In 2014 I have an NOL of approximately -71K from business partnerships. Being that we are now 2019, has the statute of limitations expired to claim that NOL or does the clock start ticking upon filing? I could absorb that NOL against income in 2012 and 2013 using the carryback provision

If I can carryback, is the procedure to:
1) file the initial 2012 & 2013 1040 and already include the 2014 NOL amount
2) file the initial 2012 & 2013 1040 and attach a 1040X with the NOL
3) file the initial 2012 & 2013 1040 and only after acceptance mail in a 1040X with the NOL?

Also if anyone has a guide on how to properly calculate the exact NOL amount I would appreciate it
Also do the federal NOL rules apply equally to New York State income tax?

Thank you

 

[LdiJ]

New York State

I am filing all my IRS back taxes starting in TY 2012. In 2014 I have an NOL of approximately -71K from business partnerships. Being that we are now 2019, has the statute of limitations expired to claim that NOL or does the clock start ticking upon filing? I could absorb that NOL against income in 2012 and 2013 using the carryback provision

If I can carryback, is the procedure to:
1) file the initial 2012 & 2013 1040 and already include the 2014 NOL amount
2) file the initial 2012 & 2013 1040 and attach a 1040X with the NOL
3) file the initial 2012 & 2013 1040 and only after acceptance mail in a 1040X with the NOL?

Also if anyone has a guide on how to properly calculate the exact NOL amount I would appreciate it
Also do the federal NOL rules apply equally to New York State income tax?

Thank you

I will be honest with you, this is a situation that requires a tax professional. It is beyond the scope of you attempting to do it without one. It is maybe even a situation that requires a tax attorney.

 

[adjusterjack]

I suggest you have a tax pro work on this for you. Seems like way too much money at stake for an amateur.

 

[North Atlantic]

I will be honest with you, this is a situation that requires a tax professional. It is beyond the scope of you attempting to do it without one. It is maybe even a situation that requires a tax attorney.

From what I understand an NOL is considered a credit and credits are subject to a 3 year statute of limitations, however there are some provisions in the tax code which would seem to extend that period to 7 years and I am unclear if an NOL qualifies for that. Specifically,

26 U.S. Code § 6511
(d)
1
(B) The effect that the deductibility of a debt or loss described in subparagraph (A) has on the application to the taxpayer of a carryover,
in lieu of the 3-year period of limitation prescribed in subsection (a), the period shall be 7 years from the date prescribed by law for filing the return for the year with respect to which the claim is made. If the claim for credit or refund relates to an overpayment on account of the effect that the deductibility of such a debt or loss has on the application to the taxpayer of a carryback, the period shall be either 7 years from the date prescribed by law for filing the return for the year of the net operating loss which results in such carryback or the period prescribed in paragraph (2) of this subsection, whichever expires the later. In the case of a claim described in this paragraph the amount of the credit or refund may exceed the portion of the tax paid within the period prescribed in subsection (b)(2) or (c), whichever is applicable, to the extent of the amount of the overpayment attributable to the deductibility of items described in this paragraph.

 

[Taxing Matters]

New York State

I am filing all my IRS back taxes starting in TY 2012. In 2014 I have an NOL of approximately -71K from business partnerships. Being that we are now 2019, has the statute of limitations expired to claim that NOL or does the clock start ticking upon filing? I could absorb that NOL against income in 2012 and 2013 using the carryback provision

Would the NOL carryback result in a refund for either 2012 or 2013 that you wish to claim, or are you simply reducing the amount owed for 2012 and 2013?

If I can carryback, is the procedure to:
1) file the initial 2012 & 2013 1040 and already include the 2014 NOL amount
2) file the initial 2012 & 2013 1040 and attach a 1040X with the NOL
3) file the initial 2012 & 2013 1040 and only after acceptance mail in a 1040X with the NOL?

In this situation you would do (1) since you are filing all three returns at the same time and thus you already know the amount of the 2014 NOL to carry back when filing the 2012 and 2013 returns.

Also if anyone has a guide on how to properly calculate the exact NOL amount I would appreciate it

I don't have one, but the IRS does. The IRS has an entire publication devoted entirely to NOLs, Publication 536. It should answer most questions you have on the computation of the NOL. If you have questions after reading it that the publication does not address then you can ask them here.

Also do the federal NOL rules apply equally to New York State income tax?

NY has its own rules for NOLs which, while similar to the federal rules, are not exactly the same.