Form 511nol - Oklahoma Net Operating Loss
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3511nol
Supplement to Form 511
Oklahoma Net Operating Loss
Full-Year Residents Only
Revised 2009
NOL Instructions...
The loss year return must be filed to establish the Oklahoma Net Operating Loss. If the loss is from a pass-through entity, the pass-
through entity must also file a tax return.
An Oklahoma net operating loss (NOL) shall be separately determined by reference to Section 172 of the Internal Revenue Code as
modified by the Oklahoma Income Tax Act and shall be allowed without regard to the existence of a Federal NOL. Therefore, for additional
information, use the Federal instructions for Form 1045 “Application for Tentative Refund” or Federal Publication 536 “Net Operating Losses
(NOLs) for Individuals, Estates, and Trusts”.
√
*
For 1996 through 2000 Oklahoma NOLs, no loss carryback shall be allowed.
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For 1996 through 2000 Oklahoma NOLs, the NOL carryforward shall not exceed 15 years.
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For 2001 through 2007 and for 2009 and subsequent Oklahoma NOLs, the loss carryback period shall be determined solely
by reference to Section 172 of the Internal Revenue Code. An election may be made to forego the Net Operating Loss (NOL)
carryback period. A written statement of the election must be part of the timely filed Oklahoma loss year return or to an amended
return for the NOL year filed within six months of the due date of your original return (excluding extensions).
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For a 2008 Oklahoma NOL, the loss carryback shall be limited to a period of two years. An election may be made to forego the
Net Operating Loss (NOL) carryback period. A written statement of the election must be part of the timely filed Oklahoma loss
year return or to an amended return for the NOL year filed within six months of the due date of your original return (excluding
extensions).
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For 2001 and subsequent Oklahoma NOLs, the loss carryforward period shall be determined solely by reference to IRC Section
172.
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Notes:
For tax year 2000 and subsequent, an NOL that is a result of a farming loss may be carried back in accordance with the provisions contained in
the Internal Revenue Code. However, the amount of the NOL carryback shall not exceed the lesser of $60,000 or the loss properly shown on the
Federal Schedule F reduced by 1/2 of the net income from all other sources other than reflected on Schedule F.
You can choose to treat a farming loss as if it were not a farming loss. To make this choice, attach a statement to your loss year return stating that
you are choosing to treat the farming loss as if it were not a farming loss under Section 172(i)(3) of the Internal Revenue Code.
Computation of Itemized Deductions
When there is positive out-of-state income, the following steps, A or B, will be used to calculate the itemized deductions attributable to
the Oklahoma NOL. When determining if there is positive out-of-state income, out-of-state income and out-of-state losses should be
netted together. When there is no positive out-of-state income, all of the itemized deductions will be claimed on the Oklahoma NOL
computation, go directly to Schedule A. If using standard deduction, go directly to Schedule A.
A.
When there is a positive Oklahoma Adjusted Gross Income and positive out-of-state income, the amount of itemized deductions
allowable is the Oklahoma pro rata share, as per the instructions on the Oklahoma return.
B.
When there is a negative Oklahoma Adjusted Gross Income and positive out-of-state income, the allowable portion of the itemized
deductions is computed as follows. The total allowable nonbusiness deductions cannot exceed the amount of nonbusiness income.
Example A
Example B
Taxpayer’s Use
1.
All nonbusiness itemized deductions
10,000.00
5,000.00
2.
All nonbusiness income (including
nonbusiness capital gains)
8,000.00
8,000.00
3.
Enter lesser of lines 1 and 2.
5,000.00
8,000.00
3,000.00
4.
Net out-of-state income.
3,000.00
5.
Subtract line 4 from line 3.
(Do not enter an amount less than zero.)
5,000.00
2,000.00
6.
Business itemized deductions
attributable to Oklahoma.
1,000.00
1,000.00
7.
Total itemized deductions
attributable to Oklahoma.
Add lines 5 and 6, enter here and
6,000.00
3,000.00
on line 2a NOL Schedule A.
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