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● raising or harvesting tree-bearing fruit, nuts or other

deduction was not fully absorbed in 2012, then you would

crops, or ornamental trees

carry the remaining amount to tax year 2013. You would

file an amended 2013 tax return and include a Schedule B

● raising, shearing, feeding, caring for, training and

with two completed columns. One column was completed

managing animals

for the 2012 tax year and the second column would be

You do not have a farming business if:

completed for the 2013 tax year.

● you perform contract harvesting,

If your marital or filing status has changed, you must

● someone else grows or raises an agricultural or

follow the federal rules and instructions for change of filing

horticultural commodity for you, or

statuses when computing the net operating loss.

● you merely buy or sell plants or animals grown or

Line 1 – Enter the amount shown on Form NOL, Schedule

raised by someone else.

A, line 25 to the appropriate carryback year. See “When

You can choose to treat a farming loss as if it were not

to Use an NOL” discussion above to determine your

a farming loss. If you make this choice, your carryback

carryback year. If your NOL is not fully absorbed in a year

period will be two years. To make this choice, indicate the

that it is carried to, complete Schedule B to figure the

carryback years in the box provided for you. Once you

amount of your NOL carryover to the next year.

waive the five-year carryback, you cannot revoke it. If you

Line 2 – Do not take into account on this line any NOL

choose not to carry back any of your farming loss, mark the

carryback from 2014 or later.

appropriate box that states that you are electing to forgo

Line 3 – Net Capital Loss Deduction.

the carryback, and carry forward your farming loss.

Enter as a positive number the amount, if any, shown (or as

Waiving the Carryback Period

previously adjusted) on Schedule D, line 21 (Form 1040).

You can choose not to carryback your NOL. If you make

If you are married filing separately for Montana, include

this choice, then you can use your NOL only during the 20-

any capital loss limitation adjustment in calculating your

year carryforward period. If you want to make this choice,

Montana adjusted gross income.

mark the box on Schedule A, electing to forgo the carry

Line 4 – Section 1202 Exclusion.

back of your NOL. You have to make this election by the

Enter as a positive number any gain that you excluded

due date (including extension of time) for filing your tax

under section 1202 on the sale or exchange of qualified

return for the tax year of your NOL. Once you elect to waive

small business stock.

the carryback period, you cannot revoke it. If you choose

to waive the carryback period for more than one NOL, you

Line 6 – Adjustments to Montana Adjusted Gross

have to make a separate election for each of your NOL

Income.

years.

If you entered an amount on lines 3 or 4, you have to

refigure certain income and deductions.

Schedule B

These include:

Use Schedule B to determine your NOL deduction for

● the special allowance for passive activity losses from

each carryback and carryforward year. Each column on

rental real estate activities,

Schedule B represents either a carryback or a carryforward

● IRA deductions,

year. Begin with the first tax year that you applied the 2014

● student loan interest deduction,

NOL deduction towards. Identify the applicable tax year

at the top of the column. For example, if you carry back a

● tuition and fees deduction,

2014 NOL to tax year 2012, you would identify the tax year

● Montana taxable social security benefits, and

as 2012 at the top of the first column.

● excludable savings bond interest.

If your NOL is more than your Montana modified taxable

For purposes of figuring your adjustment to each of these

income for the earliest year that it is carried to, you will

items, your adjusted gross income is increased by the total

have to file Schedule B to figure the amount of your NOL

of the amounts on lines 3 and 4.

that will be carried to the next tax year. The amount of your

Line 7 – Adjustment to Itemized Deductions.

carryover is the excess, if any, of your NOL carryback over

Skip this line if, for the applicable carryback year:

your modified taxable income for that earlier year. Your

Montana modified taxable income is the amount figured on

● you did not itemize deductions, or

line 9 of Form NOL, Schedule B.

● the amounts on Schedule B, lines 3, 4 and 5 are zero.

If you carry two or more NOLs to a tax year, figure your

Otherwise, complete lines 11 through 38 and enter on line

modified taxable income by deducting the NOLs in the

7 the amount from line 38 (or, if applicable, line 14 of the

order that they were incurred.

itemized deduction worksheet located at the end of these

File your completed Schedule B with each tax return that

instructions).

reflects a deduction from your 2014 NOL. For example, if

Line 10 – NOL Carryover.

you carry back your 2014 NOL to your 2012 tax year, you

After completing all applicable columns, carry forward to

would file Schedule B with your amended 2012 return. The

2014 the amount, if any, on line 10 of the column for the

Schedule B that you file with the 2012 return would only

first preceding tax year.

have one completed column. In addition, if your 2014 NOL

Montana Form Nol Instructions - Montana Net Operating Loss (Nol) And Federal Nol - 2014 Page 3

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