If you have a Net Operating Loss (NOL) amount on line 21 of Federal Form 1040, this amount is automatically entered as a positive number on line 10 of Form 6251 Alternative Minimum Tax - Individuals
. If the tax liability on the return did not decrease as much as expected after entering the NOL, it could be because the return is subject to the Alternative Minimum Tax and an adjustment to the NOL on Form 6251 is needed. This is called the Alternative Tax Net Operating Loss Deduction (ATNOLD), which is entered on line 11 per the IRS Form 6251 Instructions
. The TaxAct program does not support the automatic calculation of this amount. You must manually calculate the amount and enter it on line 11 of Form 6251 as explained below.Line 11 - Alternative Tax Net Operating Loss Deduction (ATNOLD)
The ATNOLD is the sum of the alternative tax net operating loss (ATNOL) carrybacks and carryforwards to the tax year, subject to the limitation explained later. Figure your ATNOLD as follows.
Your ATNOL for a loss year is the excess of the deductions allowed for figuring AMTI (excluding the ATNOLD) over the income included in AMTI. Figure this excess with the modifications in section 172(d), taking into account your AMT adjustments and preferences (that is, the section 172(d) modifications must be separately figured for the ATNOL). For example, the limitation of nonbusiness deductions to the amount of nonbusiness income must be separately figured for the ATNOL, using only nonbusiness income and deductions that are included in AMTI.
Your ATNOLD may be limited. To figure the ATNOLD limitation, you must first figure your AMTI without regard to the ATNOLD and any domestic production activities deduction. To do this, first figure a tentative amount for line 9 by treating line 11 as if it were zero. Next, figure a tentative total of lines 1 through 27 using the tentative line 9 amount and treating line 11 as if it were zero. This is your AMTI figured without any regard to the ATNOLD. Add any domestic production activities to this tentative total. Your ATNOLD is limited to 90% of the result
However, the 90% limit doesn't apply to an ATNOL that is attributable to qualified disaster losses (as defined in section 172(j)), qualified Gulf Opportunity Zone losses (as defined in section 1400N(k)(2)), qualified recovery assistance losses (as defined in Pub. 4492-A, information for Taxpayers Affected by the May 4, 2007 Kansas Storms and Tornadoes), qualified disaster recovery assistance losses (as defined in Pub. 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas), or 2008 or 2009 loss that you elected to carry back more than 2 years under section 172(b)(1)(H). Therefore, if an ATNOL that is carried back or carried forward to the tax year is attributable to any of those losses, the ATNOLD for the tax year is limited to the sum of:
- The smaller of:
- The sum of the ATNOL carrybacks and carryforwards to the tax year attributable to net operating losses other than those losses described in 2a below, or
- 90% of AMTI for the tax year (figured without regard to the ATNOLD and any domestic production activities deduction, as discussed earlier), plus
- The smaller of:
- The sum of the ATNOL carrybacks and carryforwards to the tax year attributable to qualified disaster losses, qualified Gulf Opportunity Zone losses, qualified recovery assistance losses, qualified disaster recovery assistance losses, and any 2008 or 2009 loss that you elected to carry back more than 2 years under section 172(b)(1)(H), or
- 100% of AMTI for the tax year (figured without regard to the ATNOLD and any domestic production activities deduction, as discussed earlier) reduced by the amount determined under (1).
Enter on line 11 the smaller of the ATNOLD or the ATNOLD limitation. Enter it as a negative amount.
Any ATNOL not used may be carried back 2 years or forward up to 20 years. In some cases, the carryback period is longer than 2 years; for details see Pub. 536
The treatment of ATNOLs doesn't affect your regular tax NOL. However, if you elected under section 172(b)(3) to forgo the carryback period for the regular tax, the election also applies for the AMT.
To access the ATNOLD section within the TaxAct® program:
- From within your TaxAct return (Online or Desktop), click on the Federal tab. On smaller devices, click the menu icon, then click Federal
- Click Taxes in the middle of the screen to expand the category and then click Alternative Minimum Tax
- Continue through the interview screens until you reach the screen titled AMT - AMTNOL
- In the first box, below Add Details, enter the unlimited alternative minimum tax net operating loss deduction subject to the 90% limitation and not related to qualifying disasters. If it is related to qualifying disasters and not subject to the 90% limitation, enter your deduction in the second box, Enter the alternative minimum tax net operating loss deduction related to qualifying disasters and not subject to the 90% limitation.