Instructions for Form 1045,

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Itemized Deductions Limitation Worksheet--See the instructions for line 34 on page 7. Summary: This is the worksheet used to determine itemized deductions limitations for carryback years, used for line 6, Form 1045, Schedule B. There are spaces available for up to three carryback years on form. The line items to be completed are:

“Enter applicable carryback year” field

“1. Add the amounts from Form 1045, Schedule B, lines 16, 22, 27, and 32, and the amounts from Schedule A (Form 1040), lines 9, 14, and 27 (see Footnote) (or as previously adjusted) Footnote: If you filed Form 1040-T in 1995, use the amounts from the appropriate lines.” field

“2. Add the amounts from Form 1045, Schedule B, lines 16 and 27; Schedule A (Form 1040), line 13 (see Footnote), and any gambling losses included on Schedule A (Form 1040), line 27 (see Footnote) (or as previously adjusted) Footnote: If you filed Form 1040-T in 1995, use the amounts from the appropriate lines.” field

“3. Subtract line 2 from line 1. If the result is zero or less, stop here; combine the amounts from Form 1045, Schedule B, lines 17, 23, 28, and 33, and enter the result on line 34 and line 6 of Form 1045, Schedule B” field

“4. Multiply line 3 by 80% (.80)” field

“5. Enter the amount from Form 1045, Schedule B, line 18” field

“6. Enter:” field

$114,700 for 1995 ($57,350 if married filing separately); $117,950 for 1996 ($58,975 if married filing separately); $121,200 for 1997 ($60,600 if married filing separately); $124,500 for 1998 ($62,250 if married filing separately); $126,600 for 1999 ($63,300 if married filing separately); $128,950 for 2000 ($64,475 if married filing separately); $132,950 for 2001 ($66,475 if married filing separately), $137,300 for 2002 ($68,650 if married filing separately); $139,500 for 2003 ($69,750 if married filing separately); or $142,700 for 2004 ($71,350 if married filing separately).

“7. Subtract line 6 from line 5” field

“8. Multiply line 7 by 3% (.03)” field

“9. Enter the smaller of line 4 or line 8” field

“10. Subtract line 9 from line 1” field

“11. Total itemized deductions from Schedule A (Form 1040), line 28 (see Footnote) (or as previously adjusted) Footnote: If you filed Form 1040-T in 1995, use the amounts from the appropriate lines.” field

“12. Subtract line 10 from line 11. Enter the difference here and on line 6 of Form 1045, Schedule B” field