Go to line 29 of the 1120 Pg 1, link to the Current-Year NOL Carryover Worksheet.
If this is the first year, complete Part I, lines B and C. If this is not the first year, complete lines B, C, and possibly D2.
Complete the Current Year NOL Carryover Worksheet with the percentage, which is to be used each following year.
Complete an Election Explanations form, stating why it is a restricted NOL and how the percent was reached. In order to add the Election Explanations form, select the Add/Display Forms List tab. Type election in the Look For box. Next, open the Election and Regulation Explanations and enter the information. This will check the form off in the Form Tree and be included in the e-file.
Complete the Election and Regulation Explanations form each year that the restricted loss carries forward.
Note: When preparing Form 1120S or 1065, any NOL will go to the K-1s and therefore to the Shareholders or Partners. Therefore, this solution applies only to Form 1120.
This information applies to all years of the UltimateTax software.