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Table 1.

Worksheet for NOL Carryover From 2006 to 2007 (For an NOL Year Before 2006)*

For Use by Individuals, Estates, and Trusts (Keep for your records.)

See the instructions under NOL Carryover From 2006 to 2007.

NOL YEAR:

USE YOUR 2006 FORM 1040, Form 1040NR (OR FORM 1041) TO COMPLETE THIS WORKSHEET:

1. Enter as a positive number your NOL deduction for the NOL year entered above from line 21 (Form

1040 or Form 1040NR) or line 15a (Form 1041)

2. Enter your taxable income without the NOL deduction for 2006 (see instructions)

3. Enter as a positive number any net capital loss deduction

Enter as a positive number any gain excluded on the sale or exchange of qualified small business stock

Enter the amount of any domestic production activities deduction

Enter any adjustments to your adjusted gross income (see instructions)

Enter any adjustments to your itemized deductions from line 32 or line 44 (see instructions)

Enter your deduction for exemptions from line 42 (Form 1040), line 39 (Form 1040NR), or line 20

(Form 1041)

Modified taxable income. Combine lines 2 through 8. Enter the result (but not less than zero)

10.

NOL carryover to 2007. Subtract line 9 from line 1. Enter the result (but not less than zero) here

and on the “other income” line of Form 1040 or Form 1040NR (or the line on Form 1041 for deductions

NOT subject to the 2% floor) in 2007

ADJUSTMENTS TO ITEMIZED DEDUCTIONS (INDIVIDUALS ONLY):

11.

Enter your adjusted gross income without the NOL deduction for the NOL year entered above or

later years. (see instructions)

12.

Combine lines 3, 4, 5, and 6 above

13.

Modified adjusted gross income. Combine lines 11 and 12 above

ADJUSTMENT TO MEDICAL EXPENSES:

14.

Enter your medical expenses from Schedule A (Form 1040), line 4

15.

Enter your medical expenses from Schedule A (Form 1040), line 1

16.

Multiply line 13 above by 7.5% (.075)

17.

Subtract line 16 from line 15. Enter the result (but not less than zero)

18.

Subtract line 17 from line 14

ADJUSTMENT TO CHARITABLE CONTRIBUTIONS:

19.

Enter your charitable contributions deduction from Schedule A (Form 1040), line 18, or Schedule A

(Form 1040NR), line 7

20.

Refigure your charitable contributions deduction using line 13 above as your adjusted gross income.

(see instructions)

21.

Subtract line 20 from line 19

ADJUSTMENT TO CASUALTY AND THEFT LOSSES:

22.

Enter your casualty and theft losses from Form 4684, line 20

23. Enter your casualty and theft losses from Form 4684, line 18

24.

Multiply line 13 above by 10% (.10)

25.

Subtract line 24 from line 23. Enter the result (but not less than zero)

26.

Subtract line 25 from line 22

ADJUSTMENT TO MISCELLANEOUS DEDUCTIONS:

27.

Enter your miscellaneous deductions from Schedule A (Form 1040), line 26, or Schedule A (Form 1040NR), line 15

28. Enter your miscellaneous deductions from Schedule A (Form 1040), line 23, or Schedule A (Form 1040NR), line 12

29.

Multiply line 13 above by 2% (.02)

30.

Subtract line 29 from line 28. Enter the result (but not less than zero)

31.

Subtract line 30 from line 27

TENTATIVE TOTAL ADJUSTMENT:

32.

Combine lines 18, 21, 26, and 31, and enter the result here. If line 13 above is $150,500 or less

($75,250 or less if married filing separately), also enter the result on line 7 above and stop here.

Otherwise, go to line 33

*Note: If you choose to waive the carryback period, and instead you choose to only carry your 2006 NOL forward, use Schedule A, Form 1045

to compute your 2006 NOL that will be carried over to 2007. Report your 2006 NOL from line 25, Schedule A, Form 1045, on the “other

income” line of your 2007 Form 1040 or Form 1040NR, or the line on Form 1041 for deductions NOT subject to the 2% floor in 2007.

Page 16

Publication 536 (2006)

Publication 536 - Net Operating Losses (Nols) For Individuals, Estates, And Trusts - Internal Revenue Service - 2006 Page 16

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