Page 301 - Individual Forms & Instructions Guide

16:23 - 13-Oct-2022
Page 7 of 15
The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
loss carryover to 2021. This could hap-
Line 9 Fileid: … /i1040schj/2022/a/xml/cycle03/source tal loss deduction on Schedule D, line 21
(which was also entered on Form 1040,
pen if the taxable income—shown on
If you used Schedule J to figure your tax your 2020 Form 1040, 1040-SR, or line 7), and a $7,000 loss on Sched-
for: Form 1040-NR, line 15 (or as previously ule D, line 16 (as adjusted). The farmer
• 2021 (that is, you entered the adjusted)—was less than zero. Enter on also had a $7,000 capital loss carryover
amount from the 2021 Schedule J, line 2 the amount by which your 2020 to 2021.
line 23, on your 2021 Form 1040, capital loss carryover to 2021 (the sum The farmer adds the $3,000 from
1040-SR, or Form 1040-NR, line 16; or of your short- and long-term capital loss Schedule D, line 21, and the $7,000 cap-
2021 Form 1040-X, line 6), enter on carryovers) exceeds the excess of the ital loss carryover. The farmer subtracts
line 9 the amount from your 2021 loss on your 2020 Schedule D, line 16, from the $10,000 result the $7,000 loss
Schedule J, line 15; or over the loss on your 2020 Schedule D, on the Schedule D, line 16, and enters
• 2020 but not 2021, enter on line 9 line 21. If you had any NOL carrybacks $3,000 on line 2 of the worksheet.
the amount from your 2020 Schedule J, to 2020, be sure you refigured your 2020 The farmer enters $14,500 on line 3
line 3. capital loss carryover to 2021. of the worksheet, the 2020 NOL from
If you figured your tax for both 2020 Line 3. If you had an NOL for 2020, their 2020 Form 1045, Schedule A,
and 2021 without using Schedule J, en- enter the amount of that NOL from the line 24. Of the $29,900 negative taxable
ter on line 9 the taxable income from 2020 Form 1045, Schedule A, line 24, income, the $0 deduction for the suspen-
your 2020 tax return (or as previously you filed with Form 1045 or Form ded exemptions, the $3,000 capital loss
adjusted by the IRS or corrected on an 1040-X. If you didn't have an NOL for deduction, and the farmer’s $12,400
amended return). But if that amount is 2020, enter the portion, if any, of the standard deduction weren’t allowed in
zero or less, complete the worksheet be- NOL carryovers and carrybacks to 2020 figuring the NOL. The farmer had a
low to figure the amount to enter on that weren't used in 2020 and were car- $14,500 loss on the 2020 Schedule F,
line 9. ried to years after 2020. the only other item on the farmer’s 2020
If you didn't file a tax return for Example. The farmer didn't use in- tax return.
2020, use the amount you would have come averaging for 2019, 2020, or 2021. The farmer enters $17,500 (the
reported as your taxable income had you The taxable income on the farmer’s $3,000 line 2 amount plus the $14,700
been required to file a tax return. Be 2020 Form 1040, line 15, is a negative line 3 amount) on line 4 and $12,400
sure to keep all your records for 2020 $29,900. The deduction for exemptions (the $29,900 line 1 amount minus the
until at least 3 years after April 18, 2023 has been suspended. The farmer sub- $17,500 line 4 amount) on line 5. The
(or the date you file your 2022 tax re- tracts from the $29,900 loss the $0 de- farmer enters $12,400 as a negative
turn, if later). duction for the suspended exemptions. amount on Schedule J, line 9. The farm-
The result is a negative $29,900, the er enters $6,000 on Schedule J, line 10,
Instructions for 2020 Taxable farmer’s 2020 taxable income, which the and a negative $6,200 on Schedule J,
Income Worksheet farmer enters as a positive amount on line 11. If the farmer uses Schedule J to
line 1 of the 2020 Taxable Income figure their tax for 2023, the farmer will
Line 2. Any net capital loss deduction Worksheet. enter the negative $6,200 amount on
on your 2020 Schedule D, line 21, isn't When the farmer filed their 2020 tax their 2023 Schedule J as the farmer’s
allowed for income averaging purposes return, the farmer had a $3,000 net capi- 2020 taxable income for income averag-
to the extent it didn't reduce your capital ing purposes.

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