Net Operating Losses
The goal of every business is to make a profit, but losses still occur. Tax professionals need to know the provisions under §172, Net Operating Loss Deduction, because tax professionals increasingly find themselves working with clients who are incurring net operating losses (NOLs). Without a basic understanding of NOLs, it’s very difficult to provide clients with the best possible tax outcome. In addition to NOLs, the IRS analyzes an NOL under alternative minimum tax (AMT) rules. This course will enhance your understanding of NOLs and alternative minimum tax NOLs (ATNOLs). This course is recommended for those who have a basic understanding of federal tax law and small businesses.
Upon completion of this course, you will be able to:
- Determine if a business or individual has incurred an NOL.
- Correctly calculate the amount of the NOL to maximize the amount to carryover or carryback.
- Identify the elections of carrying back and carrying forward the NOL.
- Identify the provisions of carrying back and carrying forward the NOL.
- Distinguish between business and nonbusiness income and losses in order to correctly calculate the NOL.
- Ensure the deadline for filing a carryback is met to provide the taxpayer the most flexibility in claiming an NOL deduction on Form 1045 or Form 1040X.
- Identify the consequences of failing to make the election to forgo the carryback.
- Correctly calculate an ATNOL using the regular NOL rules for modifications.
- Correctly calculate an ATNOL while considering AMT adjustments and preferences.
- Determine the remaining ATNOL after utilization in intervening years with accuracy and compliance with AMT rules.
- Compute the NOL deduction for each taxpayer when there is a filing status change.
This course includes an e-book and exam questions to help you earn CPE. CPE is issued after the exam is successfully completed.