Instructions For Idaho Form 56

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Instructions for Idaho Form 56
IA00563
8-29-00
GENERAL INFORMATION
For tax years beginning on and after January 1, 2000, if you have a
You may elect to forego the two-year carryback provision and carry
net operating loss, you may carry back up to $100,000 of the net
the loss over up to 20 years. The loss carryover is applied to each
operating loss to the two tax years preceding the loss year. The
year in order until absorbed or until the 20-year carryover period
loss is first applied to the second year preceding the loss year, then
has expired. You must elect to forego the carryback provision by
the first preceding year until the loss, limited to $100,000, is
the due date, including extensions, of the loss year return. The
absorbed. Any loss not absorbed in the carryback years and the
election is made by attaching a statement to the loss year return.
loss in excess of $100,000 will be a carryover up to 20 years
The statement must clearly indicate that you elect to forego the
following the loss year. The loss carryover is applied to each year
carryback provision and include your name, address, social security
in order until absorbed or until the 20-year carryover period has
number, and the amount of the loss. The statement must indicate
expired.
that you make the election pursuant to Section 63-3022(c)(1),
Idaho Code, to forego the carryback provision. You cannot revoke
For tax years beginning prior to January 1, 2000, the net operating
the election to forego the carryback provision for the loss year.
loss generally must be carried back to the three preceding years.
The carryback is limited to a maximum of $100,000. Any remaining
loss may be carried forward until used, but no longer than 15 years.
APPLICATION OF INDIVIDUAL NET OPERATING LOSS TO A YEAR IN WHICH
IDAHO ADJUSTED INCOME COMPLETELY ABSORBS THE LOSS
When Idaho adjusted income of the carryback or carryover year is
If you are carrying back the loss, you have until the 15th day of the
sufficient to absorb the net operating loss, no special adjustments
40th month following the end of the loss year to file the amended
to such income are required.
return for the absorption year.
If the net operating loss deduction is carried back and absorbed in
If the net operating loss deduction is a carryover and absorbed in
the carryback year, you must file a Form 40X, Amended Idaho
the first carryover year, subtract the loss on the tax return for the
Individual Income Tax Return, for the absorption year. Idaho adjusted
carryover year. Attach a copy of Part I to your income tax return.
income will be decreased by the amount of the loss. Because your
tax liability is reduced, you must recompute nonrefundable tax
credits. Attach a copy of Form 56 to your amended return.
APPLICATION OF INDIVIDUAL NET OPERATING LOSS TO A YEAR IN WHICH IDAHO
ADJUSTED INCOME DOES NOT COMPLETELY ABSORB THE LOSS
If, after taking previous carrybacks and carryovers into account, the
which the net operating loss has been applied. Because your
net operating loss carryback or carryover exceeds Idaho adjusted
income tax liability is zero, you will have to make an adjustment for
income of the year to which the loss is carried, certain modifications
any nonrefundable tax credits claimed on the original return. Attach
must be made to such income to determine the amount of the loss
a copy of Form 56 to your amended return.
that is absorbed. Parts II and III are provided to compute the amount
of the net operating loss absorbed in each year to which the loss is
When a net operating loss is applied to a carryover tax year for
applied when Idaho adjusted income does not completely absorb
which the income tax return has not been filed, you must compute
the loss. If your loss is not absorbed after three carryback and three
the Idaho net operating loss carryover to report on the return when
carryover years, an additional copy of Part III will be necessary.
it is filed. Compute the net operating loss that will be available for
The years to which a net operating loss is applied will be determined
application to next year on Part III. Attach a copy of Form 56 to
by whether a special election was made. Refer to the general
your income tax return when you file it.
information above.
Continue the application of the unabsorbed net operating loss to
Reporting the application of the net operating loss to a year in which
any carryback years available and, to the extent there is any net
income does not completely absorb the loss:
operating loss not absorbed in the carryback years, to carryover
years' returns which have previously been filed.
When a net operating loss has been applied to a tax year for which
an income tax return has previously been filed, you must file a Form
Following these instructions, you will apply any remaining net
40X, Amended Idaho Individual Income Tax Return, to report the
operating loss when your next income tax return is filed.
application and request a refund. File a Form 40X for each year to
INSTRUCTIONS FOR PART II
Line 1. In column a (or column b, if the loss is for tax years begin-
Idaho adjusted income of the second preceding tax year. If column
ning on or after January 1, 2000), enter the net operating loss
c is used, enter the Idaho adjusted income of the first preceding tax
carryback from line 9, Part I, as a positive number. Your carryback
year. Do not include the net operating loss carryback deduction in
is limited to $100,000. You will use column b if there is an amount
this amount. If this amount is a loss, enter it as a negative amount.
on line 7, column a or if the loss is for tax years beginning on or
after January 1, 2000. Enter the amount from line 7, column a, as
Line 3. If a capital loss in excess of capital gains was claimed on
a positive number in column b of this line. You will use column c if
the preceding tax year return(s), enter the capital loss deduction as
there is an amount on line 7, column b. Enter the amount from line
a positive amount. See federal Schedule D for the preceding tax
7, column b, as a positive number on this line in column c.
year(s).
Line 2. Enter the Idaho adjusted income of the third preceding tax
year in column a if column a is used. If column b is used, enter the

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