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Arthur Rubin
Arthur Rubin, Tax Preparer
Category: Tax
Satisfied Customers: 1540
Experience:  22 years of tax preparation experience, including individual, trust, and estate returns.
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I am trying to calculate my Modified Taxable Income (MTI) under

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I am trying to calculate my Modified Taxable Income (MTI) under part II of 2012 California Form 3805V to determine use of NOL carryovers for 2012 tax year. I can't seem to figure out how the current year usage is not deducted twice:
3805V, Part II line 1 Taxable Income = Cal AGI less itemized deductions (540 line 17 - line 18) = -740k
then in Part II, line 4 you add back NOL carryover -- but it is the NOL amount before current year's usage or after? Before = 807K, but after = -740k
So, depending on the calculation, my MTI is either $0 or -67K

How do I calculate MTI on Cal form 3805v?

Arthur Rubin :

Thank you for using Just Answer. I understand you have a question about California form 3805V.

Customer:

Yes, I am trying to calculate my NOL usage for my Cal 2012 tax return (due 10/15).

Arthur Rubin :

In Part II, you calculate the MTI (Modified Taxable Income), by adding back the NOL used to calculate the income on Part II line 1.

Arthur Rubin :

So it's the NOL before the current year's usage.

Customer:

I have no current year NOLs, just NOLs from 2008-2011. Ok so -- its total NOLs before usage, correct?

Arthur Rubin :

Yes. The MTI is used to determine the calculation in Part III as to how much of the NOL is to be carried forward to 2013 and succeeding years.

Arthur Rubin :

It doesn't affect anything else on your 2012 return.

Customer:

So, that makes MTI = 67K -- but then when I show that usage in Part III, column f, it reduces the total NOLs down in Part II line 5.

Customer:

OK, so line 5 of Part III is for 2013 return prep?

Arthur Rubin :

Yes, that is correct.

Customer:

I think I understand, but let me confirm this:

Customer:

Confirm this: Part II, line 4 (MTI cal) = Total NOLs before any current year usage and Part III, Line 5 = Total NOLs remaining after current year usage

Arthur Rubin :

Exactly.

Customer:

Cool, you solved, many thanks -- positive feedback will be left of course!

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