skip navigation

Search Help
Navigation Help

Tax Map Index
ABCDEFGHI
JKLMNOPQR
STUVWXYZ#

International
Tax Topic Index

Affordable Care Act
Tax Topic Index

FAQs
Forms
Publications
Tax Topics

Comments
About Tax Map

IRS.gov Website
taxmap/pubs/p536-000.htm#en_us_publink1000177297
Publication 536

 
Net Operating Losses (NOLs) for 
Individuals, Estates, and Trusts

rule

Reminders(p1)


taxmap/pubs/p536-000.htm#en_us_publink1000268098
Future developments.(p1)
For the latest developments related to Publication 536, such as legislation enacted after we release it, go to www.irs.gov/pub536.
taxmap/pubs/p536-000.htm#en_us_publink1000297368
Photographs of missing children.(p1)
The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

taxmap/pubs/p536-000.htm#en_us_publink1000270293Introduction

If your deductions for the year are more than your income for the year, you may have a net operating loss (NOL). An NOL year is the year in which an NOL occurs. You can use an NOL by deducting it from your income in another year or years.
taxmap/pubs/p536-000.htm#en_us_publink1000177311

What this publication covers.(p1)

rule
This publication discusses NOLs for individuals, estates, and trusts. It covers:
To have an NOL, your loss must generally be caused by deductions from your:
A loss from operating a business is the most common reason for an NOL.
Partnerships and S corporations generally cannot use an NOL. However, partners or shareholders can use their separate shares of the partnership's or S corporation's business income and business deductions to figure their individual NOLs.
taxmap/pubs/p536-000.htm#en_us_publink1000177312

Keeping records.(p2)

rule
You should keep records for any tax year that generates an NOL for 3 years after you have used the carryback/carryforward or 3 years after the carryforward expires.
Tax Tip
You should attach all required documents to the Form 1045 or Form 1040X. For details, see the instructions for Form 1045 or Form 1040X.
taxmap/pubs/p536-000.htm#en_us_publink1000177313

What is not covered in this publication?(p2)

rule
The following topics are not covered in this publication.
taxmap/pubs/p536-000.htm#en_us_publink1000201655

Section references.(p2)

rule
Section references are to the Internal Revenue Code unless otherwise noted.
taxmap/pubs/p536-000.htm#en_us_publink1000297369

Comments and suggestions.(p2)

rule
We welcome your comments about this publication and your suggestions for future editions.
You can write to us at the following address:

Internal Revenue Service
Tax Forms and Publications Division
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224


We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.
You can send your comments from www.irs.gov/formspubs/. Click on "More Information." and then on "Comment on Tax Forms and Publications."
Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products.
taxmap/pubs/p536-000.htm#en_us_publink1000297370
Ordering forms and publications.(p2)
Visit www.irs.gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received.

Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61705-6613


taxmap/pubs/p536-000.htm#en_us_publink1000297371
Tax questions.(p2)
If you have a tax question, check the information available on IRS.gov or call 1-800-829-1040. We cannot answer tax questions sent to either of the above addresses.

taxmap/pubs/p536-000.htm#TXMP644be044

Useful items

You may want to see:


Form (and Instructions)
 1040X: Amended U.S. Individual Income Tax Return
 1045: Application for Tentative Refund

See How To Get Tax Help near the end of this publication for information about getting these forms.
taxmap/pubs/p536-000.htm#en_us_publink1000177318

NOL Steps(p2)

rule
Follow Steps 1 through 5 to figure and use your NOL.
taxmap/pubs/p536-000.htm#en_us_publink1000177319

Step 1.(p2)

rule
Complete your tax return for the year. You may have an NOL if a negative figure appears on the line below:
If the amount on that line is not negative, stop here — you do not have an NOL.
taxmap/pubs/p536-000.htm#en_us_publink1000177320

Step 2.(p2)

rule
Determine whether you have an NOL and its amount. See How To Figure an NOL, later. If you do not have an NOL, stop here.
taxmap/pubs/p536-000.htm#en_us_publink1000177322

Step 3.(p2)

rule
Decide whether to carry the NOL back to a past year or to waive the carryback period and instead carry the NOL forward to a future year. See When To Use an NOL, later.
taxmap/pubs/p536-000.htm#en_us_publink1000177324

Step 4.(p2)

rule
Deduct the NOL in the carryback or carryforward year. See How To Claim an NOL Deduction, later. If your NOL deduction is equal to or less than your taxable income without the deduction, stop here — you have used up your NOL.
taxmap/pubs/p536-000.htm#en_us_publink1000177326

Step 5.(p2)

rule
Determine the amount of your unused NOL. See How To Figure an NOL Carryover, later. Carry over the unused NOL to the next carryback or carryforward year and begin again at Step 4.
taxmap/pubs/p536-000.htm#en_us_publink1000177328

Note.(p2)

rule
If your NOL deduction includes more than one NOL amount, apply Step 5 separately to each NOL amount, starting with the amount from the earliest year.