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IRS.gov Website
Instructions for Schedule J (Form 1040)
taxmap/instr/i1040sj-009.htm#en_us_publink1000274220

Line 13(p10)

rule
If you used Schedule J to figure your tax for 2014 (that is, you entered the amount from the 2014 Schedule J, line 23, on your 2014 Form 1040, line 44, on your 2014 Form 1040NR, line 42, or on Form 1040X for 2014), enter on line 13 the amount from your 2014 Schedule J, line 3.
If you didn't use Schedule J to figure your tax for 2014, enter on line 13 the taxable income from your 2014 tax return (or as previously adjusted by the IRS or corrected on an amended return). But if that amount is zero or less, complete the worksheet below to figure the amount to enter on line 13.
If you didn't file a tax return for 2014, use the amount you would have reported as your taxable income had you been required to file a tax return. Be sure to keep all your records for 2014 until at least 3 years after April 15, 2016 (or the date you file your 2015 tax return, if later).
taxmap/instr/i1040sj-009.htm#en_us_publink1000274221

Instructions for 2014 Taxable Income Worksheet(p10)

rule
taxmap/instr/i1040sj-009.htm#en_us_publink1000274222
Line 2.(p10)
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Any net capital loss deduction on your 2014 Schedule D, line 21, isn't allowed for income averaging purposes to the extent it didn't reduce your capital loss carryover to 2015. This could happen if the taxable income before subtracting exemptions—shown on your 2014 Form 1040, line 41, or your 2014 Form 1040NR, line 39 (or as previously adjusted)—was less than zero. Enter on line 2 the amount by which your 2014 capital loss carryover to 2015 (the sum of your short- and long-term capital loss carryovers) exceeds the excess of the loss on your 2014 Schedule D, line 16, over the loss on your 2014 Schedule D, line 21.
taxmap/instr/i1040sj-009.htm#en_us_publink1000274223
Line 3.(p10)
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If you had an NOL for 2014, enter the amount of that NOL from the 2014 Form 1045, Schedule A, line 25, you filed with Form 1045 or Form 1040X. If you didn't have an NOL for 2014, enter the portion, if any, of the NOL carryovers and carrybacks to 2014 that weren't used in 2014 and were carried to years after 2014.
taxmap/instr/i1040sj-009.htm#en_us_publink1000274224
Example.(p10)
John Farmington didn't use income averaging for 2012, 2013, or 2014. The taxable income before subtracting exemptions on his 2014 Form 1040, line 41, is a negative $1,000. This amount includes an NOL deduction on his 2014 Form 1040, line 21, of $1,350. The $1,350 is the portion of the 2013 NOL that was remaining from 2012 to be carried to 2014. See the examples earlier. A deduction for exemptions of $3,950 is shown on Form 1040, line 42, and line 43, taxable income, is limited to zero. John doesn't have an NOL for 2014. John subtracts from the $1,000 negative amount on Form 1040, line 41, the $3,950 deduction for exemptions. The result is a negative $4,950, John's 2014 taxable income, which he enters as a positive amount on line 1 of the 2014 Taxable Income Worksheet.
When John filed his 2014 tax return, he had a $3,000 net capital loss deduction on Schedule D, line 21 (which was also entered on Form 1040, line 13), a $7,000 loss on Schedule D, line 16, and a $5,000 capital loss carryover to 2015 (his 2014 capital loss carryover to 2015 was $5,000, not $4,000, because the amount on his Form 1040, line 41, was a negative $1,000). John adds the $3,000 from Schedule D, line 21, and the $5,000 carryover. He subtracts from the $8,000 result the $7,000 loss on his Schedule D, line 16, and enters $1,000 on line 2 of the worksheet.
John enters -0- on line 3 of the worksheet because he doesn't have an NOL for 2014 and didn't have an NOL carryover from 2014 available to carry to 2015 and later years. The NOL deduction for 2014 of $1,350 was reduced to zero because it didn't exceed his modified taxable income of $3,350. Modified taxable income is figured by adding back the $3,000 net capital loss deduction and the $3,950 exemption deduction to negative taxable income (figured without regard to the NOL deduction) of $3,600. John enters $1,000 on line 4 and $3,950 on line 5. He enters $3,950 as a negative amount on Schedule J, line 13. He enters $6,000 on Schedule J, line 14, and $2,050 on Schedule J, line 15. If he uses Schedule J to figure his tax for 2016, he will enter $2,050 on his 2016 Schedule J as his 2014 taxable income for income averaging purposes.
taxmap/instr/i1040sj-009.htm#en_us_publink1000274238
pencil2014 Taxable Income Worksheet—Line 13
Complete this worksheet if your 2014 taxable income was zero or less. See the instructions above before completing this worksheet.
1.Figure the taxable income from your 2014 tax return (or as previously adjusted) without limiting it to zero. If you had an NOL for 2014, don't include any NOL carryovers or carrybacks to 2014. Enter the result as a positive amount 1. 
2.If there is a loss on your 2014 Schedule D, line 21, add that loss (as a positive amount) and your 2014 capital loss carryover to 2015. Subtract from that sum the amount of the loss on your 2014 Schedule D, line 16, and enter the result 2.   
3.If you had an NOL for 2014, enter it as a positive amount. Otherwise, enter as a positive amount the portion, if any, of the NOL carryovers and carrybacks to 2014 that weren't used in 2014 and were carried to years after 2014 3.   
4.Add lines 2 and 34. 
5.Subtract line 4 from line 1. Enter the result as a negative amount on Schedule J, line 13 5.