Some questions about Audit From Irs
Q.I would really appreciate if anyone could advice me on this. I had capital loss of $36,948 in stock market during 1999-2001 period out of that I only claimed $3000 once The last return I filed was in 2001, in which I mentioned the capital loss carryover of $36,948. I never filed the return for the period 2002-2004, as I had no income in US during that period because I am not a citizen of US and I was back in my home country during that period of time. I came back to US in Dec 2005 again, filed the return for 2005 because I worked for 3 weeks during that year. I did not mention anything about capital loss carry over in my 2005 return because my gross income for that period was only $1,354. I have filled the Form 1040; in Schedule D in Line 6 I have entered unused short-term loss of $33,948. As in 2001 return I showed the short-term loss of $36,948. 2001 return was the last return when I claimed capital loss of $3000. I didn't file the return for 2002, 2003, 2004 as during that period of time I had no income and I was non-resident alien during that period. I filed the return for 2005 but didn't file Schedule D, as my income was very less to offset i.e. $1,354. So now my question is that 1. Can I simply carryover capital loss of 2001 into this year return and wait for any query/audit from IRS as they might get suspicious by finding that from what source this capital loss is getting carried over as I filed for 2005 but didn't mentioned about that in that return or should I tag any kind of note with the return that this capital loss is a carryover from 2001 which was never used during 2002 - 2005. 2. Do I need to amend the return of 2005 just to reflect the capital loss carryover. I am not sure whether this is required. 3. Last but not least do I need to maintain the capital loss carry over worksheet and attach to the return. As I never did that before because all I had was losses which I incured during boom time and my only source of income is W-2. No other investment/property etc so my return is very simple except that complex capital loss carry over.
A.You still need to do the worksheets for intervening years and retain in your files. And for those years the capital losses are suspended, so you will effectively resume in 2006. You say you are not a US citizen and did not have any income in the US between 2002 and 2005, except $1,354. You do not say what visa or residence status you do have. Are you a greencard holder? Or otherwise considered a permanent resident of the US? Did you have income in your home country during these years? If you were a US resident, you are required to file a US tax return and report ALL worldwide income. So, the amount of capital loss carryover may not be determined from the facts available.
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