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Question

How do I reduce the NOL carryover to reflect amounts no longer available?

Answer

UltraTax CS/1120 determines if any NOL carryover is available by netting the Prior (Income Offset) NOL Utilized amounts with the Income (Loss) amounts for each of the preceding tax years.

• Enter the amount of the loss reflected in the Income (Loss) field that has been utilized in prior years as a positive number.

  For example, a $10,000 NOL was generated in the 2017 tax year. $2,000 of the NOL was carried back, $3,000 was utilized in the 2019 tax year, and $4,000 was utilized in the 2020 tax year. The screen fields should appear as indicated in the following table.

  Preceding Tax Year	Income (Loss)	Adjustments to NOL	Prior (Income Offset) NOL Utilized
  2017	(10,000)		7,000
  2018
  2019	3,000		(3,000)
  2020	4,000		(4,000)
  2021

• Enter the amount of income reflected in the Income (Loss) field that has been offset by NOL as a negative number. This is only necessary for income in the preceding years that can be used to carry back a current-year NOL.

  For example, if income (Taxable income before net operating loss deduction and special deductions less Special deductions) in 2020 was $15,000 and in 2021 there was a $7,000 NOL that was carried back to 2020, the screen fields should appear as indicated in the following table.

  Preceding Tax Year	Income (Loss)	Adjustments to NOL	Prior (Income Offset) NOL Utilized
  2020	15,000		(7,000)
  2021	(7,000)		7,000

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