Form 1045 (2012) Checklist
Purpose and Eligibility
Form 1045 permits individuals, estates, and trusts to request a tentative refund by carrying back 2012 net operating losses, unused general business credits, or net Section 1256 contracts losses to prior years. Corporations and partnerships cannot use this form. The 2012 form includes revised Schedule A reflecting the Domestic Production Activities Deduction calculation under IRC §199, which remained fully deductible in 2012 without phase-out restrictions.
Filer Verification and Header Information
You must confirm your status as an individual, estate, or trust before completing Form 1045. If you are an estate or trust, line 1 of Schedule A requires taxable income increased by the charitable deduction, income distribution deduction, and exemption amount.
Enter your name, Social Security number, mailing address, and daytime phone number on page 1. For foreign addresses, complete the country name, province or county, and postal code fields.
Carryback Type and Tax Year Documentation
Carryback Selection
Identify the type of carryback by checking the appropriate box on line 1.
- Check line 1a for net operating loss carryback.
- Check line 1b for unused general business credit carryback.
- Check line 1c for net Section 1256 contracts loss carryback.
All three carryback types were available in 2012 without statutory phase-out restrictions that later applied to certain credit carrybacks.
Filing Dates and Carryback Years
Complete the following entries related to tax year documentation.
- Insert the 2012 calendar year or the specific fiscal year beginning and ending dates on line 2a.
- Enter the actual date the 2012 return was filed on line 2b.
- Enter the year of the first carryback if the application is for an unused credit created by another carryback.
- Complete lines 4 through 6 to address prior return filing status differences, Social Security number changes, or accounting period modifications.
Required Disclosures
Answer line 7 if you filed a Tax Court petition for any carryback year. Disclose on line 8 whether the tax decrease results from a reportable transaction requiring Form 8886 disclosure in 2012.
Answer line 9 if the NOL or Section 1256 loss caused the release of foreign tax credits or dependent credits. The 2012 form still required detailed foreign credit tracing, absent later streamlined procedures.
Net Operating Loss Calculation on Schedule A
Starting Point and Capital Loss Limitations
Begin at Schedule A line 1 by entering your 2012 Form 1040 line 41 or Form 1040NR line 39 amount. For estates and trusts, enter taxable income increased by the charitable deduction, income distribution deduction, and exemption amount.
Complete the capital loss limitation steps as follows.
- Calculate the nonbusiness capital loss limitation using lines 2 through 5.
- Apply the business capital loss limitation on lines 11 through 15.
- Include any Section 1202 small business stock exclusion on lines 16 through 21 using the 2012 Schedule D.
Deductions and Final NOL
Enter the Domestic Production Activities Deduction from Form 1040 line 35 on Schedule A line 23. Add prior-year NOL carryforwards as a positive number on line 24. Combine all components on line 25 to determine your NOL. If line 25 shows a negative amount, you have an NOL to carry back to prior years.
Schedule B Preparation for Each Carryback Year
General Carryback Rules
The general NOL carryback period for 2012 was two years. Eligible losses from casualty, theft, or federally declared disasters for qualified small businesses had a three-year carryback period.
Farming losses are carried back five years, and specified liability losses are carried back ten years. Complete a separate Schedule B column for each carryback year, starting with the earliest year.
Modified Taxable Income Calculation
For each carryback year, enter the NOL deduction as a positive number on Schedule B line 1. Taxable income before NOL carryback on line 2 must exclude the 2012 NOL but include adjustments specific to that prior year.
Include the following components when calculating modified taxable income.
- Enter the net capital loss deduction.
- Enter the Section 1202 exclusion.
- Enter the Domestic Production Activities Deduction.
- Enter adjustments to adjusted gross income and itemized deductions for the target year.
Itemized Deduction Adjustments
Complete the Itemized Deduction Adjustment Worksheet on Schedule B lines 11 through 38 only for carryback years if line 3, 4, or 5 exceeds zero.
- Refigure itemized deductions using 2012 rules.
- Refigure medical expenses using the 7.5 percent AGI floor that applied in 2012.
- Recalculate mortgage insurance premiums for the carryback year.
- Recalculate charitable contributions for the carryback year.
- Refigure casualty losses using the 10 percent AGI floor.
- Refigure miscellaneous deductions using the 2 percent AGI floor.
No itemized deduction phase-out based on income applied in 2012 because the Pease limitation was suspended for tax years 2010 through 2012.
Tax Decrease Computation
For each carryback year column on page 1, enter the NOL deduction after carryback on line 10. Recalculate adjusted gross income on line 11, deductions on line 12, and taxable income on line 15.
Complete the tax computation steps as follows.
- Determine income tax using the tax rates applicable to the specific carryback year.
- Include Alternative Minimum Tax on line 17.
- Include general business credits on line 19.
- Include other allowable credits on line 20.
- Subtract total credits from total tax to determine the decrease in tax on line 27.
- Line 27 represents the tentative refund amount.
Claim of Right Adjustment and Signature
If the 2012 tax decrease includes an overpayment from a prior-year inclusion of income later recovered or restored, enter the claim of right adjustment amount on line 28 with an attached computation. IRC Section 1341 remained unaffected by later tax reforms and still required itemized calculations in 2012.
Sign and date Form 1045. Both spouses must sign if filing jointly. All executors or administrators must sign for estates. The fiduciary or authorized representative must sign for trusts.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
