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I have $200,000 schedule C net income fully offset by K-1 loss in 2015 and PTA from same K-1 in 2016 and 2017 (at current pace i will not consume the loss till 2021). Using the Sched E loss to offset 100% of Sched C income on Sched SE and report gross income of $0 on 1040 line 22 (total income), negative post alimony on line 37 (AGI). 1040 negative income on line 41 is even more negative after deductions, this negative income passes the NOL test, so am also carrying these forward.
Since Sched SE shows $0, and line 37 of 1040 is and will continue to show $0 my understanding is that you're not required to file a return. This seems kind of odd given business income, Sched E losses, and NOL.
1. Am i correct on the 1040 NOL?
2. Am i correct that I do not have to file returns?
3. Should i file even if i don't have to?
4. If I file the statute of limitations starts ticking, or does this not matter since past years impact current and future year's income?
My concern is if i do file there is something to audit. If i dont file but get audited once i have to file again that first years net income will be an accumulation all all of the prior years so to prove current year i have to prove history - but then i do have records and completed but unfiled returns for those years which i could produce in an audit.
Since Sched SE shows $0, and line 37 of 1040 is and will continue to show $0 my understanding is that you're not required to file a return. This seems kind of odd given business income, Sched E losses, and NOL.
1. Am i correct on the 1040 NOL?
2. Am i correct that I do not have to file returns?
3. Should i file even if i don't have to?
4. If I file the statute of limitations starts ticking, or does this not matter since past years impact current and future year's income?
My concern is if i do file there is something to audit. If i dont file but get audited once i have to file again that first years net income will be an accumulation all all of the prior years so to prove current year i have to prove history - but then i do have records and completed but unfiled returns for those years which i could produce in an audit.