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Megan C
Megan C, Certified Public Accountant (CPA)
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How is an ATNOLD determined?

Resolved Question:

How is an ATNOLD determined?
Submitted: 1 year ago.
Category: Finance
Expert:  Megan C replied 1 year ago.
Per the IRS,

The ATNOLD is the sum of the alternative tax net operating loss (ATNOL) carryovers and carrybacks to the tax year, subject to the limitation explained later on this page. 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. Add any domestic production activities deduction to this tentative total. Your ATNOLD is limited to 90% of the result.

However, the 90% limit does not 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 a 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:

  1. The smaller of:

    1. 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

    2. 90% of AMTI for the tax year (figured without regard to the ATNOLD and any domestic production activities deduction, as discussed earlier), plus

  2. The smaller of:

    1. 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

    2. 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.

Any ATNOL not used may be carried back 2 years or forward up to 20 years (15 years for loss years beginning before 1998). In some cases, the carryback period is longer than 2 years; for details, see Pub. 536. See Pub. 4492-A for the part of an ATNOL that is a qualified recovery assistance loss or Pub. 4492-B for the part of an ATNOL that is a qualified disaster recovery assistance loss. If you elect to carry back a 2008 or 2009 ATNOL 5 years under section 172(b)(1)(H) as amended by Public Law 111-92, the 50% taxable income limit under section 172(b)(1)(H)(iv) is applied separately based on the previously-determined AMTI for that carryback year. In other words, the ATNOLD in that 5th preceding year is limited to 50% of your AMTI for that year, which is determined without using the ATNOL for the loss year or any later tax year.

The treatment of ATNOLs does not affect your regular tax NOL.


Hope this helps! :-)
Customer: replied 1 year ago.

I think I worded the above question incorrectly. How is an alternative tax net operation loss dedudction determined?

By using regular taxable income]

By using regular taxable income reduced by AMT income

By using AMT income reduced by regular taxable income

By using AMT income

Expert:  Megan C replied 1 year ago.
Thanks, Diana

The ATNOL is the excess of the deductions allowed in figuring AMTI (excluding the ATNOLD) over the income included in AMTI, so my answer is by using AMT income


Thanks

Megan
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 15588
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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