NOL Carryover From 2000 to 2001

If you had an NOL deduction that reduced your taxable income on your 2000 return to zero (to less than zero, if an estate or trust), complete Table 1, Worksheet for NOL Carryover From 2000 to 2001. It will help you figure your NOL to carry to 2001. Keep the worksheet for your records.

Worksheet Instructions

At the top of the worksheet, enter the NOL year for which you are figuring the carryover.

More than one NOL. If your 2000 NOL deduction includes amounts for more than one loss year, complete this worksheet only for one loss year. To determine which year, start with your earliest NOL and subtract each NOL separately from your taxable income figured without the NOL deduction. Complete this worksheet for the earliest NOL that reduces your taxable income below zero. Your earlier NOLs will be completely used up in 2000. Your NOL carryover to 2001 is the total of the amount on line 9 of the worksheet and all later NOL amounts.

Example. Your taxable income for 2000 is $4,000 without your $9,000 NOL deduction. Your NOL deduction includes $2,000 for 1998 and $7,000 for 1999. Subtract your 1998 NOL of $2,000 from $4,000. This gives you taxable income of $2,000. Your 1998 NOL is now completely used up. Subtract your $7,000 1999 NOL from $2,000. This gives you taxable income of ($5,000). You now complete the worksheet for your 1999 NOL. Your NOL carryover to 2001 is the unused part of your 1999 NOL from line 9 of the worksheet.

Line 2. Treat your NOL deduction for the NOL year entered at the top of the worksheet and later years as a positive amount. Add it to your negative taxable income. Enter the result on line 2.

Line 5. You must refigure the following income and deductions based on adjusted gross income.

1. The special allowance for passive activity losses from rental real estate activities.
2. Taxable social security and tier 1 railroad retirement benefits.
3. IRA deduction.
4. Excludable savings bond interest.
5. Excludable employer-provided adoption benefits.
6. Student loan interest deduction.

If none of these items apply to you, enter zero on line 5. Otherwise, increase your adjusted gross income by the total of lines 3 and 4 and your NOL deduction for the NOL year entered at the top of the worksheet and later years. Using this increased adjusted gross income, refigure the items that apply, in the order listed above. Your adjustment for each item is the difference between the refigured amount and the amount included on your return. Add the adjustments for previous items to your adjusted gross income before refiguring the next item. Keep a record of your computations.

Enter your total adjustments for the above items on line 5.

Line 6. Enter zero if you claimed the standard deduction. Otherwise, use lines 10 through 41 of the worksheet to figure the amount to enter on this line. Complete only those sections that apply to you.

Estates and trusts. Enter zero on line 6 if you did not claim any miscellaneous deductions on line 15b (Form 1041) or a casualty or theft loss. Otherwise, refigure these deductions by substituting modified adjusted gross income (see below) for adjusted gross income. Subtract the recomputed deductions from those claimed on the return. Enter the result on line 6.

Modified adjusted gross income. To refigure miscellaneous itemized deductions of an estate or trust ( Form 1041, line 15b), modified adjusted gross income is the total of the following amounts.

1. The adjusted gross income on the return.
2. The amounts from lines 3 and 4 of the worksheet.
3. The exemption amount from Form 1041, line 20.
4. The NOL deduction for the NOL year entered at the top of the worksheet and for later years.

To refigure the casualty and theft loss deduction of an estate or trust, modified adjusted gross income is the total of the following amounts.

1. The adjusted gross income amount you used to figure the deduction claimed on the return.
2. The amounts from lines 3 and 4 of the worksheet.
3. The NOL deduction for the NOL year entered at the top of the worksheet and for later years.

Line 10. Treat your NOL deduction for the NOL year entered at the top of the worksheet and for later years as a positive amount. Add it to your adjusted gross income. Enter the result on line 10.

Line 19. If you had a contributions carryover from 1999 to 2000 and your NOL deduction includes an amount from an NOL year before 1999, you may have to reduce your contributions carryover. This reduction is any adjustment you made to your 1999 charitable contributions deduction when figuring your NOL carryover to 2000. Use the reduced contributions carryover to figure the amount to enter on line 19.

Table 1

Table 1 (Continued)

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