Question

Christina is a sole proprietor who sustained a non-farm net operating loss in 2019. Which is NOT an option for her?

Waive the carryback period by attaching an election statement to her timely-filed 2020 return.

Amend her 2019 return to attach a statement electing to waive the carryback period.

File Form 1040-X to carry the loss back to her 2014 return.

File Form 1045 by December 31, 2020 to carry the loss back to her 2014 return.

Answer 1

Option (b) is correct. She can amend her 2019 return within 6 months of the due date of 2019 return. She also filed 2020 return which means 6 months have been passed and this is not an option for her.

Option (a) is incorrect. She may make this election to waive the carryback period for her 2019 NOL on your income tax return for your first tax year ending after March 27, 2020.

Option (c) is incorrect. If she does not file Form 1045 until January 1, 2021 or later, she will file a Form 1040X for 2014 to claim a refund from 2014 related to her 2019 net operating loss.

Option (d) is incorrect. She can file Form 1045 by December 31, 2020 to carry the loss back to her 2014 return.