Preparing Form 1139 (1120)

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This topic provides the steps and guidelines to prepare 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.
  • The IRS Instructions for Form 1139 refer to a repeal of the NOL carryback: "For losses incurred in tax years beginning after December 31, 2020, the NOL carryback rules apply only for farming losses and losses from insurance companies, other than life insurance companies". 

Before you begin

UltraTax CS cannot recalculate the corporation's prior-year tax returns. 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. For example, if the corporation has an NOL in the current year and you are carrying the NOL back to preceding tax years, recalculate the 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.

Steps to complete screen 1139

  1. Select the checkbox Calculate carryback of net operating loss.
  2. Enter the preceding years and the corresponding before carryback amounts in the Carryback Information table at the bottom of the screen.
  3. Go to the NOL tab and input Income (Loss) fields for the appropriate years.

    Note: Income (Loss) fields must be completed for Screen 1139 to calculate.

  4. Close the current year return. 
  5. Open the earliest prior year return affected by the carryback.
  6. Enter the NOL carryback information in the Net operating loss field, on the Amend-2 screen, in Separate Filings folder. 
  7. Use the recalculated return to enter the After Carryback information in the current year return.
  8. Close the prior year return.
  9. Open the current year return.
  10. Go to the 1139 screen, in the Carryovers folder.
  11. Complete the fields in the After Carryback column, for the prior year return. 
  12. Use the Net Operating Loss Worksheet to determine the remaining NOL.
  13. Use the remaining NOL and repeat steps 4-12 for the remaining years.

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