Preparing Form 1139 (1120)

Alerts and notices
Leave feedback

Contact information (optional):

Leave this blank:

Please tell us how we can make this information more helpful.


Characters left:

This topic provides guidelines for preparing Form 1139.

Note: At this time, Form 1139 cannot be efiled. When you electronically file a corporate return that includes Form 1139, you can file a paper copy of the form at a later date.

Completing Screen 1139

Due to tax law changes, UltraTax CS does not have the ability to recalculate the corporation's prior-year tax returns. Therefore, complete the following steps before completing Screen 1139.

  1. Obtain copies of the corporation's original returns for years to which you are carrying information back.
  2. Recalculate the prior year's tax returns that are affected by the carryback. In other words, if the corporation sustained an NOL in the current year and you are carrying the NOL back to preceding tax years, recalculate these prior-year returns, taking into consideration the carryback.
  3. Using the corporation's original returns and the recalculated returns, complete the information requested in Screen 1139.

Example - Preparing Form 1139

Note: If you are filing Form 1139 for a net operating loss carryback, you must enter the carryback period in the Carryback period for net operating loss field to calculate an NOL carryback.

On the 2016 1120 tax return, Corporation X has a net operating loss (NOL) of $10,000. On its 2015 1120 tax return,there is taxable income of $1,000, which allows the corporation to carryback $1,000 of the $10,000 NOL to 2015. Corporation X would like to file Form 1139 for a quick refund of taxes due to the carryback of the NOL. Complete the following steps to process Form 1139 for Corporation X.

  1. If Corporation X's tax information was not proforma'd, you need to obtain copies of the corporation's original returns for 2015, the year to which you are carrying information back to, and enter the required Form 1139 information in Screen 1139 (in the Carryover folder) in the Before Carryback column for the first preceding tax year. Corporation X's 2015 1120 original tax return shows a taxable income of $1,000 and an income tax of $150. In addition, the 2015 taxable income of $1,000 should be entered in Screen NOL in the Income / (Loss) column for the first preceding tax year. The Screen 1139 fields should appear as indicated in the table that follows in step 3.
  2. Recalculate Corporation X's 2015 tax return that is affected by the carryback of $1,000 by entering the NOL carryback information in Screen Amend-2 in the 2015 UltraTax/1120 client's return. Enter $1,000 in the Regular net operating loss field in the Net Operating Loss and Capital Loss Carryback section. Print the Corporation X's 2015 1120 recalculated tax return to use when completing Form 1139 in 2016 UltraTax/1120 by entering the recalculated amounts in Screen 1139 in the After Carryback column for the first preceding tax year. Corporation X's 2015 1120 recalculated tax return shows a taxable income of $0, an NOL deduction of $1,000, and an income tax of $0. The Screen 1139 fields should appear as indicated in the table that follows in step 3.

    Note: The current UltraTax/1120 does not have the ability to recalculate the corporation's prior-year tax returns due to tax law changes; therefore, this step is necessary in recalculating prior-year tax returns.

  3. Using Corporation X's 2015 1120 original and recalculated tax return, complete the information requested in Screen 1139 for the 1st preceding tax year (12/31/15) as follows:
    Field name Before carryback After carryback
    Taxable income $1,000 N/A
    Capital loss carryback
    Net operating loss $1,000
    Income tax $150 $0
    AMT
    Gen business credits
    Other credits
    Personal holding company tax
    Other taxes

    See How does NOL carryback affect the Domestic Production Activity Deduction (DPAD) in the prior year? for more information.

Share This