2018 NOL Carryforward Rules - Need Simple Explanation for S-Corp Losses

Thanks for this explanation, but I'm still a bit confused. Where exactly on my 2021 return would I note this carryforward? Is there a specific form or line? And what if my S-corp was dissolved in early 2022 - does that affect my ability to use these losses?

You'll report your NOL carryforward on Form 1040, Schedule 1, line 8 "Other Income" and write "NOL" next to it. You should also attach a statement showing how you calculated the NOL carryforward amount. Dissolving your S-corporation doesn't affect your ability to use the losses that have already passed through to you. Once the loss is on your personal return, it's yours to use regardless of what happens to the S-corp later. The losses stay with you as the individual taxpayer, not with the business entity.

Does taxr.ai work for partnerships too? I have a similar situation but with a partnership K-1 showing losses. And how accurate is it compared to having a CPA review your returns?

I've been burned by online tax tools before that claim to handle complex situations but then don't actually work for S-corps. Does it really understand the passive loss limitations and basis issues that come with S-corp losses? Those can get complicated fast.

Yes, it absolutely works for partnerships too. It handles K-1s from partnerships, S-corps, and even estates and trusts. The system is specifically designed to interpret those forms and apply the correct tax rules. As for accuracy, I found it incredibly detailed - more thorough than my previous CPA honestly. It flagged issues my accountant missed related to basis limitations and passive activity rules. The tool specifically looks for these complex scenarios and explains them in plain language.

I don't understand how this would work better than just calling the IRS yourself. Aren't they just calling the same number everyone else is? And are you sure the advice from random IRS phone agents is reliable for something complicated like NOLs?

The service doesn't cost much at all compared to the time you save - I don't remember the exact amount but it was very reasonable. They have some technology that navigates the IRS phone system and holds your place in line, then calls you when they have an agent on the line. You're right that they're calling the same IRS number, but the difference is you don't have to sit on hold for hours. The system does that for you, and you only get on the phone when there's actually an agent ready to talk. As for reliability of advice, the agent I spoke with was in the business tax department and extremely knowledgeable about S-corps and NOLs specifically.

Wait, this actually works? I thought it was impossible to get through to the IRS these days. How much does this service cost? Seems too good to be true.

I don't understand how this would work better than just calling the I

Thanks for bringing this up - I hadn't considered the basis limitations! Any simple way to calculate my basis? I've had the S-corp for about 5 years, started with $5K initial investment, and have been putting in some money each year to cover expenses (around $15K total over the years). Never taken any distributions.

Your basis starts with your initial investment ($5K) and increases by any additional capital contributions ($15K) and any income that was reported to you on K-1s over the years. It decreases by losses and any distributions you took. So if you never took distributions, your basis would be $5K + $15K + any income reported on K-1s from previous years - any losses from previous years. You'll need to look at all your old K-1s to track this properly. If your basis went to zero in a previous year, any excess losses would be suspended and carried forward until you have basis again. This is separate from the NOL rules and often catches people by surprise.

I tried using TurboTax for my S-corp NOL last year and it was a nightmare. It kept asking me questions that didn't make sense for an S-corp, and I don't think it properly tracked my basis. I ended up paying a CPA to fix everything and it cost me way more than if I'd just gone to them in the first place.