Instructions For Form 1045 - 2004 Page 3

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years. See the instructions for line 10
Only the eligible loss portion of the
the 1st preceding year. Any such loss
on this page to figure the tax years to
NOL can be carried back 3 years.
that is not applied in the 10 preceding
which you can carry an NOL. Use the
years can be carried forward up to 20
Example. You have a $20,000
remaining pairs of columns for each
years.
NOL of which only $5,000 is an
consecutive preceding tax year until
eligible loss. The $5,000 eligible loss
Only the specified liability loss
the loss is fully absorbed. Enter the
is carried back 3 years, but the
portion of the NOL can be carried
ordinal number of years the loss is
remaining $15,000 loss is carried
back 10 years.
being carried back and the date the
back only 2 years, although you had
You can elect to treat a specified
carryback year ends in the spaces
modified taxable income of more than
liability loss as if it were not a
provided in the headings above line
$5,000 in the 3rd preceding year.
specified liability loss. If you make
10 for each pair of columns.
Farming losses. To the extent the
this election, the loss carryback
Example. Your tax year is the
NOL is a farming loss (defined on
period will be 2 years (3 years to the
2004 calendar year and you are
page 1), that part of the loss is
extent the loss is an eligible loss; 5
carrying an NOL back 2 years. You
carried back to the 5th tax year
years to the extent the loss is a
enter “2nd” and “12/31/02” in the left
before the loss. Any such loss not
farming loss). To make this election
column heading in the spaces
used in that year is carried to the 4th
for 2004, attach to your 2004 income
provided. The column heading now
preceding year and then applied
tax return filed by the due date
reads “2nd preceding tax year ended
consecutively forward through the 1st
(including extensions) a statement
12/31/02.”
preceding year. Any such loss not
that you are electing to treat any
applied in the 5 preceding years can
For each carryback year, enter in
2004 specified liability losses as if
be carried forward up to 20 years.
the column labeled “Before
they were not specified liability
carryback” the amounts for the
losses. If you filed your original return
Only the farming loss portion of the
carryback year as shown on your
on time, you can make the election
NOL can be carried back 5 years.
original or amended return. If the
on an amended return filed within 6
Example. You operate a farming
amounts were previously adjusted by
months after the due date of the
business and incur an NOL of
you or the IRS, enter the amounts
return (excluding extensions). Attach
$50,000 for 2004. $25,000 of the
after adjustment.
the election to the amended return,
NOL is attributable to income and
and write “Filed pursuant to section
deductions of your farming business;
Line 10—NOL Deduction
301.9100-2” on the election
$10,000 is attributable to a fire in your
statement. File the amended return at
personal residence (an eligible loss);
After Carryback
the same address you used for your
and the remaining $15,000 is
Use the following rules to figure the
original return. Once made, the
attributable to your spouse’s work as
tax years to which you must carry an
election is irrevocable.
an employee. The $25,000 farming
NOL shown on Schedule A, line 24. If
loss is carried back 5 years; the
Special rules. Special rules apply if
an NOL is not fully absorbed in a year
$10,000 eligible loss is carried back 3
you filed a joint return (or a separate
to which it is carried, complete
return) for some but not all of the tax
years; and the remaining $15,000
Schedule B to figure the amount to
loss is carried back 2 years. Any
years involved in figuring an NOL
carry to the next carryback year.
unused portion of this NOL can be
carryback. For details, see Pub. 536.
Note. You may need to use
carried forward up to 20 years.
Attach a computation showing how
additional Forms 1045 to carry back
you figured the carryback.
For a farming loss, you can elect a
an NOL. Complete lines 1 through 9
loss carryback period of 2 years
Line 11—Adjusted
and Schedule A on only one Form
instead of 5 years. To make this
1045. Use this Form 1045 for the
election for 2004, attach to your 2004
Gross Income
earliest preceding tax years. You
income tax return filed by the due
must sign this Form 1045, but do not
Enter in the column labeled “Before
date (including extensions) a
carryback ” your adjusted gross
need to sign the other Forms 1045.
statement that you are electing a 2
income (AGI) for the carryback year
General rule. You generally must
year carryback period for any 2004
as shown on your original or
carry back the entire NOL to the 2nd
farming losses. If you filed your
amended return.
tax year before the loss year. Any
original return on time, you can make
loss not used in the 2nd preceding
Enter in the column labeled “After
the election on an amended return
year is then carried to the 1st
carryback ” your adjusted gross
filed within 6 months after the due
income refigured after you apply the
preceding year. Any loss not applied
date of the return (excluding
in the 2 preceding years can be
NOL or net 1256 contracts loss
extensions). Attach the election to the
carryback.
carried forward up to 20 years. The
amended return, and write “Filed
2-year carryback period does not
pursuant to section 301.9100-2” on
To refigure your adjusted gross
apply to the portion of an NOL
the election statement. File the
income for the year in which an NOL
attributable to an eligible loss, a
amended return at the same address
is fully absorbed or a net section
farming loss, or a specified liability
you used for your original return.
1256 contracts loss is carried back,
loss.
Once made, the election is
refigure any items of income and any
irrevocable.
Eligible losses. To the extent the
deductions that are based on or
NOL is an eligible loss (defined on
Specified liability losses. To the
limited to a percentage of your
page 1), it is carried back to the 3rd
extent an NOL is a specified liability
adjusted gross income. Amounts to
tax year before the loss. Any loss not
loss (defined on page 1), that part of
refigure include:
used in that year is carried to the 2nd
the loss is carried back to the 10th
The special allowance for passive
and then the 1st preceding year. Any
tax year before the loss. Any such
activity losses from rental real estate
such loss that is not applied in the 3
loss not used in that year is carried to
activities,
preceding years can be carried
the 9th preceding year and then
Taxable social security benefits,
forward up to 20 years.
applied consecutively forward through
IRA deductions,
-3-

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