Using UltraTax CS to carry back a net section 1256 contracts loss

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UltraTax CS calculates the net section 1256 contract loss on Form 6781. When Form 6781 box D, Net section 1256 contracts loss election is marked, and line 5 has an amount, UltraTax CS marks the Section 1256 contracts loss three year carryback period to Form 1045 field on this screen. The loss amount from Form 6781, line 6 will be displayed on Form 1045, line 1c, Net section 1256 contracts loss.

Follow these steps to complete the Computation of Decrease in Tax section on this screen.

  1. Obtain copies of the tax original returns or, if applicable, the amended tax returns, for the tax years involved in the carryback period you determined on Screen 1045. Enter the information from these returns in the Before carryback fields of the respective years being carried back. Clients that have been proforma’d will already have this information completed. Verify the proforma’d information with the original returns.
  2. Open UltraTax CS of the third preceding year of the carryback. Using screen 6781, follow the Form 6198 instructions pertaining to the carryback on where to enter the net section 1256 contract loss.
  3. Use the refigured return to enter in the amounts in the After carryback column.
  4. If any losses are not absorbed in the earliest carryback period, refigure the next period using the next year of UltraTax CS. Continue until the first preceding year is completed.

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