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Got losses? Be sure to elect the carryback with your original 2008 return
April 10, 2009
See Update: IRS eases up on electing 5-year NOL carryback
The new rules for electing a five-year carryback for small business losses has a nasty trap: you have to elect the credit not on the carryback claim, but on the return reporting the loss. If you fail to make the election on the return itself, you only get the standard NOL period of two years (three years if you are a Bernie Madoff client).
You can extend your deadline for making the five-year election by extending the return. If your loss comes from a pass-through entity on a K-1, you make the election on your 2008 1040. You actually claim the carryback on Form 1045.
If you aren't sure whether you want to make the election, extending your return extends your carryback election deadline. If you've already filed, you should look carefully at the rules Section 5 of Revenue Procedure 2009-19 to see what to do.
After today, you have five more days to check back here for filing season tax tips!
Related: IRS issues rules for 5-year NOL carryback.
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The items included in the Tax Update Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation.
Joe Kristan writes the Tax Update items, and any opinions expressed or implied are not neccesarily shared by anyone else at Roth & Company, P.C. Address questions or comments on Tax Updates to
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