My client came to me new for 2007 with a very large NOL carryforward from 2006. A copy of 2006 return shows no backup to provide me with information regarding AMT NOL amount. I'm not convinced the same amount would be correct. Any suggestions??
If you have the entire 2006 return, which preference items are you unable to verify?
2006 - NOL is listed on Line 21. The only income on this return was a loss to begin with so this gets carried forward to 2007 return. 2007 return used approx. $2,500 of the NOL and still much more to carryforward. 2008 poses an entirely different picture. My client has Guaranteed Payments from a Sch K-1 (Form 1065). Now we're dealing with AMT. I have the NOL carryforward on the worksheet, but not as AMT NOL. I'm not quite sure what to enter there. I'm not convinced entering the same amount would be correct. The firm that prepared 2006 doesn't exist now, so we can't contact them. Does this help you in helping me???
Well, it helps me in realizing that I probably can't help you.
Are you suspicious of the guy? From what you CAN see of his 2006 business, do you see any AMT "red flags?" This is just me, but if I could answer those two questions in the negative, I'd probably go ahead and do the return based on the data you have. The IRS will reject the return if there is no AMTNOL calculation, but I don't think they pay much attention to them beyond that. No one, not even the IRS, knows how to compute the darn things, anyway.
Intended that as an answer:
Well, it helps me in realizing that I probably can't help you.
Are you suspicious of the guy? From what you CAN see of his 2006 business, do you see any AMT "red flags?" This is just me, but if I could answer those two questions in the negative, I'd probably go ahead and do the return based on the data you have. The IRS will reject the return if there is no AMTNOL calculation, but I don't think they pay much attention to them beyond that. No one, not even the IRS, knows how to compute the darn things, anyway.
I am not suspicious with this client at all. I can easily see where everything has been ligitimate in his line of work. Would you enter the same NOL carryforward figure to the AMT NOL line on the worksheet? One more question...his Schedule K-1 (form 1065) shows a figure in Box 4 (Guaranteed Payments), NOT in Box 14. Since it is not in Box 14, with all the research I've done, I am beginning to believe he does NOT pay SE tax??? I think he should, but what I keep coming up with is "amounts in Box 14" are to have an SE tax.
I appreciate all your help.
Lacking any other information, yes, I'd enter the same number for AMTNOL and NOL. If it should be different, let the IRS track it down.
On a less pleasant note, I agree that he should be paying SE tax on his guaranteed payments. I have trouble thinking of a single counter-example.
Glad to help.
