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3. IRA deductions.

The adjusted gross income amount you

NOL Carryover From

used to figure the deduction claimed on

4. Excludable savings bond interest.

the return.

2010 to 2011

5. Excludable employer-provided adoption

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The amounts from lines 3 through 5 of the

benefits.

worksheet.

If you had an NOL deduction carried forward

6. The student loan interest deduction.

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The NOL deduction for the NOL year en-

from a year prior to 2010 that resulted in your

If none of these items apply to you, enter

tered at the top of the worksheet and for

having taxable income on your 2010 return of

zero on line 6. Otherwise, increase your ad-

later years.

zero (of less than zero, if an estate or trust),

justed gross income by the total of lines 3

complete Table 1, Worksheet for NOL Carryover

through 5 and your NOL deduction for the NOL

From 2010 to 2011 on the following page. It will

Line 11. Treat your NOL deduction for the

year entered at the top of the worksheet and

help you figure your NOL to carry to 2011. Keep

NOL year entered at the top of the worksheet

the worksheet for your records.

later years. Using this increased adjusted gross

and for later years as a positive amount. Add it to

income, refigure the items that apply, in the

your adjusted gross income. Enter the result on

Worksheet Instructions

order listed above. Your adjustment for each

line 11.

item is the difference between the refigured

At the top of the worksheet, enter the NOL year

amount and the amount included on your return.

Line 20. Is your modified adjusted gross in-

for which you are figuring the carryover.

Combine the adjustments for previous items

come from line 13 of this worksheet more than

with your adjusted gross income before refigur-

More than one NOL. If your 2010 NOL deduc-

$260,000 ($135,000 if married filing sepa-

ing the next item. Keep a record of your compu-

tion includes amounts for more than one loss

rately)?

tations.

year, complete this worksheet only for one loss

Yes. Your deduction is limited. Refigure

Enter your total adjustments for the above

year. To determine which year, start with your

items on line 6.

your deduction using the New Motor Vehicle Tax

earliest NOL and subtract each NOL separately

Deduction Worksheet in the 2010 Schedule A

from your taxable income figured without the

(Form 1040). On line 4 of the New Motor Vehicle

Line 7. Enter zero if you claimed the standard

NOL deduction. Complete this worksheet for the

Tax Deduction Worksheet, enter the amount

deduction. Otherwise, use lines 11 through 38 of

earliest NOL that results in your having taxable

from line 13 of this worksheet.

the worksheet to figure the amount to enter on

income below zero. Your NOL carryover to 2011

this line. Complete only those sections that ap-

is the total of the amount on line 10 of the

No. Your deduction is not limited. Enter

worksheet and all later NOL amounts.

ply to you.

the amount from line 19 on line 20 and enter -0-

on line 21.

Estates and trusts. Enter zero on line 7 if

Example. Your taxable income for 2010 is

you did not claim any miscellaneous deductions

$5,000 without your $9,000 NOL deduction.

on Form 1041, line 15b, or a casualty or theft

Line 23. Is your modified adjusted gross in-

Your NOL deduction includes a $2,000 carry-

loss. Otherwise, refigure these deductions by

come from line 13 of this worksheet more than

over from 2008 and a $7,000 carryover from

substituting modified adjusted gross income

$100,000 ($50,000 if married filing separately)?

2009. Subtract your 2008 NOL of $2,000 from

(see below) for adjusted gross income. Subtract

$5,000. This gives you taxable income of

Yes. Your deduction is limited. Refigure

the recomputed deductions from those claimed

your deduction using the Mortgage Insurance

$3,000. Your 2008 NOL is now completely used

on the return. Enter the result on line 7.

Premiums Deduction Worksheet in the 2010 In-

up. Subtract your $7,000 2009 NOL from

structions for Schedule A (Form 1040). On line 2

$3,000. This gives you taxable income of

Modified adjusted gross income. To

of the Mortgage Insurance Premiums Deduction

($4,000). You now complete the worksheet for

refigure miscellaneous itemized deductions of

Worksheet, enter the amount from line 13 of this

your 2009 NOL. Your NOL carryover to 2011 is

an estate or trust (Form 1041, line 15b), modi-

worksheet.

the unused part of your 2009 NOL from line 10 of

fied adjusted gross income is the total of the

the worksheet.

following amounts.

No. Your deduction is not limited. Enter

the amount from line 22 on line 23 and enter -0-

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Line 2. Treat your NOL deduction for the NOL

The adjusted gross income on the return.

on line 24.

year entered at the top of the worksheet and

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The amounts from lines 3 through 5 of the

later years as a positive amount. Add it to your

worksheet.

negative taxable income (figured without the

Line 26. If you had a contributions carryover

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NOL deduction). Enter the result on line 2.

The exemption amount from Form 1041,

from 2009 to 2010 and your NOL deduction

line 20.

includes an amount from an NOL year before

Line 6. You must refigure the following income

2009, you may have to reduce your contribu-

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and deductions based on adjusted gross in-

The NOL deduction for the NOL year en-

tions carryover. This reduction is any adjustment

come.

tered at the top of the worksheet and for

you made to your 2009 charitable contributions

later years.

1. The special allowance for passive activity

deduction when figuring your NOL carryover to

losses from rental real estate activities.

2010. Use the reduced contributions carryover

To refigure the casualty and theft loss deduc-

to figure the amount to enter on line 26.

tion of an estate or trust, modified adjusted gross

2. Taxable social security and tier 1 railroad

retirement benefits.

income is the total of the following amounts.

Publication 536 (2010)

Page 15

Publication 536 - Net Operating Losses (Nols) For Individuals, Estates, And Trusts - 2010 Page 15

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