Looking for a Irs Publications? Download it for free!

Line 5. You must refigure the following income

Modified adjusted gross income. To

NOL Carryover From

and deductions based on adjusted gross in-

refigure miscellaneous itemized deductions of

come.

an estate or trust (Form 1041, line 15b), modi-

2005 to 2006

fied adjusted gross income is the total of the

1. The special allowance for passive activity

following amounts.

losses from rental real estate activities.

•

If you had an NOL deduction carried forward

The adjusted gross income on the return.

from a year prior to 2005 that reduced your

2. Taxable social security and tier 1 railroad

•

The amounts from lines 3 and 4 of the

taxable income on your 2005 return to zero (to

retirement benefits.

worksheet.

less than zero, if an estate or trust), complete

3. IRA deduction.

•

Table 1, Worksheet for NOL Carryover From

The exemption amount from Form 1041,

2005 to 2006. It will help you figure your NOL to

4. Excludable savings bond interest.

line 20.

carry to 2006. Keep the worksheet for your rec-

•

5. Excludable employer-provided adoption

The NOL deduction for the NOL year en-

ords.

benefits.

tered at the top of the worksheet and for

later years.

Worksheet Instructions

6. Student loan interest deduction.

7. Tuition and fees deduction.

To refigure the casualty and theft loss deduc-

At the top of the worksheet, enter the NOL year

tion of an estate or trust, modified adjusted gross

for which you are figuring the carryover.

8. Domestic production activities deduction.

income is the total of the following amounts.

More than one NOL. If your 2005 NOL deduc-

If none of these items apply to you, enter

•

The adjusted gross income amount you

tion includes amounts for more than one loss

zero on line 5. Otherwise, increase your ad-

used to figure the deduction claimed on

year, complete this worksheet only for one loss

justed gross income by the total of lines 3 and 4

the return.

year. To determine which year, start with your

and your NOL deduction for the NOL year en-

•

earliest NOL and subtract each NOL separately

tered at the top of the worksheet and later years.

The amounts from lines 3 and 4 of the

from your taxable income figured without the

Using this increased adjusted gross income,

worksheet.

NOL deduction. Complete this worksheet for the

refigure the items that apply, in the order listed

•

The NOL deduction for the NOL year en-

earliest NOL that reduces your taxable income

above. Your adjustment for each item is the

tered at the top of the worksheet and for

below zero. Your NOL carryover to 2006 is the

difference between the refigured amount and

later years.

total of the amount on line 9 of the worksheet

the amount included on your return. Combine

and all later NOL amounts.

the adjustments for previous items with your

adjusted gross income before refiguring the next

Line 10. Treat your NOL deduction for the

Example. Your taxable income for 2005 is

item. Keep a record of your computations.

NOL year entered at the top of the worksheet

$4,000 without your $9,000 NOL deduction.

Enter your total adjustments for the above

and for later years as a positive amount. Add it to

Your NOL deduction includes a $2,000 carry-

items on line 5.

your adjusted gross income. Enter the result on

over from 2003 and a $7,000 carryover from

line 10.

Line 6. Enter zero if you claimed the standard

2004. Subtract your 2003 NOL of $2,000 from

deduction. Otherwise, use lines 10 through 41 of

Line 19. If you had a contributions carryover

$4,000. This gives you taxable income of

the worksheet to figure the amount to enter on

from 2004 to 2005 and your NOL deduction

$2,000. Your 2003 NOL is now completely used

this line. Complete only those sections that ap-

includes an amount from an NOL year before

up. Subtract your $7,000 2004 NOL from

ply to you.

2004, you may have to reduce your contribu-

$2,000. This gives you taxable income of

tions carryover. This reduction is any adjustment

($5,000). You now complete the worksheet for

Estates and trusts. Enter zero on line 6 if

you made to your 2004 charitable contributions

your 2004 NOL. Your NOL carryover to 2006 is

you did not claim any miscellaneous deductions

deduction when figuring your NOL carryover to

the unused part of your 2004 NOL from line 9 of

on Form 1041, line 15b, or a casualty or theft

2005. Use the reduced contributions carryover

the worksheet.

loss. Otherwise, refigure these deductions by

to figure the amount to enter on line 19.

substituting modified adjusted gross income

Line 2. Treat your NOL deduction for the NOL

(see below) for adjusted gross income. Subtract

year entered at the top of the worksheet and

the recomputed deductions from those claimed

later years as a positive amount. Add it to your

on the return. Enter the result on line 6.

negative taxable income. Enter the result on line

Page 14

Publication 536 - Net Operating Losses (Nols) For Individuals, Estates, And Trusts - 2005 Page 14

Related Articles

Related forms

Related Categories