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1. The special allowance for passive activity

The exemption amount from Form 1041,

NOL Carryover From

losses from rental real estate activities.

line 20.

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2011 to 2012

2. Taxable social security and tier 1 railroad

The NOL deduction for the NOL year en-

retirement benefits.

tered at the top of the worksheet and for

later years.

3. IRA deductions.

If you had an NOL deduction carried forward

from a year prior to 2011 that resulted in your

4. Excludable savings bond interest.

To refigure the casualty and theft loss deduc-

having taxable income on your 2011 return of

tion of an estate or trust, modified adjusted gross

5. Excludable employer-provided adoption

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

income is the total of the following amounts.

benefits.

complete Table 1, Worksheet for NOL Carryover

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From 2011 to 2012 on the following page. It will

The adjusted gross income amount you

6. The student loan interest deduction.

help you figure your NOL to carry to 2012. Keep

used to figure the deduction claimed on

If none of these items apply to you, enter

the worksheet for your records.

the return.

zero on line 6. Otherwise, increase your ad-

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The amounts from lines 3 through 5 of the

Worksheet Instructions

justed gross income by the total of lines 3

worksheet.

through 5 and your NOL deduction for the NOL

year entered at the top of the worksheet and

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At the top of the worksheet, enter the NOL year

The NOL deduction for the NOL year en-

later years. Using this increased adjusted gross

for which you are figuring the carryover.

tered at the top of the worksheet and for

income, refigure the items that apply, in the

later years.

More than one NOL. If your 2011 NOL deduc-

order listed above. Your adjustment for each

tion includes amounts for more than one loss

item is the difference between the refigured

year, complete this worksheet only for one loss

Line 11. Treat your NOL deduction for the

amount and the amount included on your return.

year. To determine which year, start with your

NOL year entered at the top of the worksheet

Combine the adjustments for previous items

earliest NOL and subtract each NOL separately

with your adjusted gross income before refigur-

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

from your taxable income figured without the

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

your adjusted gross income. Enter the result on

NOL deduction. Complete this worksheet for the

tations.

line 11.

earliest NOL that results in your having taxable

Enter your total adjustments for the above

income below zero. Your NOL carryover to 2012

items on line 6.

Line 20. Is your modified adjusted gross in-

is the total of the amount on line 10 of the

come from line 13 of this worksheet more than

Line 7. Enter zero if you claimed the standard

worksheet and all later NOL amounts.

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

deduction or the amounts on lines 3 through 5

Yes. Your deduction is limited. Refigure

Example. Your taxable income for 2011 is

are zero. Otherwise, use lines 11 through 33 of

your deduction using the Mortgage Insurance

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

the worksheet to figure the amount to enter on

Premiums Deduction Worksheet in the 2011 In-

Your NOL deduction includes a $2,000 carry-

this line. Complete only those sections that ap-

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

over from 2009 and a $7,000 carryover from

ply to you.

2010. Subtract your 2009 NOL of $2,000 from

of the Mortgage Insurance Premiums Deduction

Estates and trusts. Enter zero on line 7 if

$5,000. This gives you taxable income of

Worksheet, enter the amount from line 13 of this

you did not claim any miscellaneous deductions

$3,000. Your 2009 NOL is now completely used

worksheet.

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

up. Subtract your $7,000 2010 NOL from

No. Your deduction is not limited. Enter

loss. Otherwise, refigure these deductions by

$3,000. This gives you taxable income of

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

substituting modified adjusted gross income

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

on line 21.

(see below) for adjusted gross income. Subtract

your 2010 NOL. Your NOL carryover to 2012 is

the recomputed deductions from those claimed

the unused part of your 2010 NOL from line 10 of

Line 23. If you had a contributions carryover

on the return. Enter the result on line 7.

the worksheet.

from 2010 to 2011 and your NOL deduction

Modified adjusted gross income. To

Line 2. Treat your NOL deduction for the NOL

includes an amount from an NOL year before

refigure miscellaneous itemized deductions of

year entered at the top of the worksheet and

2010, you may have to reduce your contribu-

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

later years as a positive amount. Add it to your

tions carryover. This reduction is any adjustment

fied adjusted gross income is the total of the

negative taxable income (figured without the

you made to your 2010 charitable contributions

following amounts.

NOL deduction). Enter the result on line 2.

deduction when figuring your NOL carryover to

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The adjusted gross income on the return.

2011. Use the reduced contributions carryover

Line 6. You must refigure the following income

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to figure the amount to enter on line 23.

and deductions based on adjusted gross in-

The amounts from lines 3 through 5 of the

come.

worksheet.

Publication 536 (2011)

Page 15

Publication 536 - Net Operating Losses (Nols) For Individuals, Estates, And Trusts - 2011 Page 15

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