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previous page Previous Page: Publication 536 - Net Operating Losses (NOLs) for Individuals, Estates, and Trusts - How To Figure an NOL Carryover
next page Next Page: Publication 536 - Net Operating Losses (NOLs) for Individuals, Estates, and Trusts - How To Get Tax Help
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication
taxmap/pubs/p536-005.htm#en_us_publink100096493

NOL Carryover From 2008 to 2009(p16)


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If you had an NOL deduction carried forward from a year prior to 2008 that reduced your taxable income on your 2008 return to zero (to less than zero, if an estate or trust), complete Table 1, Worksheet for NOL Carryover From 2008 to 2009. It will help you figure your NOL to carry to 2009. Keep the worksheet for your records.
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Worksheet Instructions(p16)


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At the top of the worksheet, enter the NOL year for which you are figuring the carryover.
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More than one NOL.(p16)


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If your 2008 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 NOL carryover to 2009 is the total of the amount on line 10 of the worksheet and all later NOL amounts.
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Example.(p16)

Your taxable income for 2008 is $4,000 without your $9,000 NOL deduction. Your NOL deduction includes a $2,000 carryover from 2006 and a $7,000 carryover from 2007. Subtract your 2006 NOL of $2,000 from $4,000. This gives you taxable income of $2,000. Your 2006 NOL is now completely used up. Subtract your $7,000 2007 NOL from $2,000. This gives you taxable income of ($5,000). You now complete the worksheet for your 2007 NOL. Your NOL carryover to 2009 is the unused part of your 2007 NOL from line 10 of the worksheet.
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Line 2.(p16)


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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.
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Line 6.(p16)


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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 deductions.
  4. Excludable savings bond interest.
  5. Excludable employer-provided adoption benefits.
  6. The student loan interest deduction.
  7. The tuition and fees deduction.
If none of these items apply to you, enter zero on line 6. Otherwise, increase your adjusted gross income by the total of lines 3 through 5 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. Combine the adjustments for previous items with 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 6.
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Line 7.(p16)


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Enter zero if you claimed the standard deduction. Otherwise, use lines 11 through 47 of the worksheet to figure the amount to enter on this line. Complete only those sections that apply to you.
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Estates and trusts.(p16)
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Enter zero on line 7 if you did not claim any miscellaneous deductions on Form 1041, line 15b, 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 7.
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Modified adjusted gross income.(p16)
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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.
To refigure the casualty and theft loss deduction of an estate or trust, modified adjusted gross income is the total of the following amounts.
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Line 11.(p16)


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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 11.
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Line 20.(p16)


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Is your modified adjusted gross income from line 13 of this worksheet more than $100,000 ($50,000 if married filing separately)?
Yes. Your deduction is limited. Refigure your deduction using the Qualified Mortgage Insurance Premiums Deduction Worksheet in the 2008 Instructions for Schedule A & B (Form 1040). On line 2 of the Qualified Mortgage Insurance Premiums Deduction Worksheet, enter the amount from line 13 of this worksheet.
No. Your deduction is not limited. Enter the amount from line 19 on line 20 and enter -0- on line 21.
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Line 23.(p16)


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If you had a contributions carryover from 2007 to 2008 and your NOL deduction includes an amount from an NOL year before 2007, you may have to reduce your contributions carryover. This reduction is any adjustment you made to your 2007 charitable contributions deduction when figuring your NOL carryover to 2008. Use the reduced contributions carryover to figure the amount to enter on line 23.
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