2016 Publication 536 X536A P536

User Manual: X536A

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Page Count: 11

Contents
Future Developments ............ 1
Reminder .................... 1
Introduction .................. 1
NOL Steps ................... 2
How To Figure an NOL ........... 2
Form 1045, Schedule A
Example ................ 3
When To Use an NOL ............ 3
Exceptions to 2-Year Carryback
Rule .................. 3
Waiving the Carryback Period ..... 4
How To Carry an NOL Back or
Forward ................ 4
How To Claim an NOL Deduction ..... 4
Deducting a Carryback ......... 4
Deducting a Carryforward ........ 5
Change in Marital Status ........ 5
Change in Filing Status ......... 5
How To Figure an NOL Carryover ..... 6
NOL Carryover From 2016 to 2017 .... 7
Worksheet Instructions ......... 7
How To Get Tax Help ............ 9
Index ..................... 11
Future Developments
For the latest information about developments
related to Pub. 536, such as legislation enacted
after it was published, go to www.irs.gov/
pub536.
Reminder
Photographs of missing children. The Inter-
nal Revenue Service is a proud partner with the
National Center for Missing & Exploited
Children® (NCMEC). Photographs of missing
children selected by the Center may appear in
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Introduction
If your deductions for the year are more than
your income for the year, you may have a net
operating loss (NOL). An NOL year is the year
in which an NOL occurs. You can use an NOL
by deducting it from your income in another
year or years.
What this publication covers. This publica-
tion discusses NOLs for individuals, estates,
and trusts. It covers:
How to figure an NOL,
Department
of the
Treasury
Internal
Revenue
Service
Publication 536
Cat. No. 46569U
Net Operating
Losses (NOLs)
for
Individuals,
Estates, and
Trusts
For use in preparing
2016 Returns
Get forms and other information faster and easier at:
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When to use an NOL,
How to claim an NOL deduction, and
How to figure an NOL carryover.
To have an NOL, your loss must generally
be caused by deductions from your:
Trade or business,
Work as an employee,
Casualty and theft losses,
Moving expenses, or
Rental property.
A loss from operating a business is the most
common reason for an NOL.
Partnerships and S corporations generally
cannot use an NOL. However, partners or
shareholders can use their separate shares of
the partnership's or S corporation's business in-
come and business deductions to figure their in-
dividual NOLs.
Keeping records. You should keep records
for any tax year that generates an NOL for 3
years after you have used the carryback/carry-
forward or 3 years after the carryforward ex-
pires.
You should attach all required docu
ments to the Form 1045 or Form
1040X. For details, see the instructions
for Form 1045 or Form 1040X.
What is not covered in this publication?
The following topics are not covered in this pub-
lication.
Bankruptcies. See Pub. 908, Bankruptcy
Tax Guide.
NOLs of corporations. See Pub. 542, Cor-
porations.
Section references. Section references are to
the Internal Revenue Code unless otherwise
noted.
Comments and suggestions. We welcome
your comments about this publication and your
suggestions for future editions.
You can send us comments from irs.gov/
formspubs. Click on “More Information” and
then on “Give us feedback.”
Or you can write to:
Internal Revenue Service
Tax Forms and Publications
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
We respond to many letters by telephone.
Therefore, it would be helpful if you would in-
clude your daytime phone number, including
the area code, in your correspondence.
Although we cannot respond individually to
each comment received, we do appreciate your
feedback and will consider your comments as
we revise our tax products.
Ordering forms and publications. Visit
irs.gov/formspubs to download forms and publi-
cations. Otherwise, you can go to irs.gov/
orderforms to order current and prior-year forms
and instructions. Your order should arrive within
10 business days.
Tax questions. If you have a tax question
not answered by this publication, check
TIP
IRS.gov and How To Get Tax Help at the end of
this publication.
Useful Items
You may want to see:
Form (and Instructions)
Amended U.S. Individual Income
Tax Return
Application for Tentative Refund
See How To Get Tax Help near the end of this
publication for information about getting these
forms.
NOL Steps
Follow Steps 1 through 5 to figure and use your
NOL.
Step 1. Complete your tax return for the year.
You may have an NOL if a negative amount ap-
pears on the line below.
Individuals — Form 1040, line 41, or Form
1040NR, line 39.
Estates and trusts — See the instructions
for Form 1041, line 22, for information
about taxable income and NOLs.
Step 2. Determine whether you have an NOL
and its amount. See How To Figure an NOL,
later. If you do not have an NOL, stop here.
Step 3. Decide whether to carry the NOL back
to a past year or to waive the carryback period
and instead carry the NOL forward to a future
year. See When To Use an NOL, later.
Step 4. Deduct the NOL in the carryback or
carryforward year. See How To Claim an NOL
Deduction, later. If your NOL deduction is equal
to or less than your taxable income without the
deduction, stop here — you have used up your
NOL.
Step 5. Determine the amount of your unused
NOL. See How To Figure an NOL Carryover,
later. Carry over the unused NOL to the next
carryback or carryforward year and begin again
at Step 4.
Note. If your NOL deduction includes more
than one NOL amount, apply Step 5 separately
to each NOL amount, starting with the amount
from the earliest year.
How To Figure an NOL
If your deductions for the year are more than
your income for the year, you may have an
NOL.
There are rules that limit what you can de-
duct when figuring an NOL. In general, the fol-
lowing items are not allowed when figuring an
NOL.
Any deduction for personal exemptions.
Capital losses in excess of capital gains.
The section 1202 exclusion of the gain
from the sale or exchange of qualified
small business stock.
1040X
1045
Nonbusiness deductions in excess of non-
business income.
The net operating loss deduction.
The domestic production activities deduc-
tion.
Form 1045, Schedule A. Use Form 1045,
Schedule A, to figure an NOL. The following
discussion explains Schedule A.
First, complete Form 1045, Schedule A,
line 1, using amounts from your return. If line 1
is a negative amount, you may have an NOL.
Next, complete the rest of Form 1045,
Schedule A, to figure your NOL.
Nonbusiness deductions (line 6). Enter
on line 6 deductions that are not connected to
your trade or business or your employment. Ex-
amples of deductions not related to your trade
or business are:
Alimony paid,
Deductions for contributions to an IRA or a
self-employed retirement plan,
Health savings account deduction,
Archer medical savings account deduc-
tion,
Most itemized deductions (except for
casualty and theft losses, state income tax
on trade and business income, and any
employee business expenses), and
The standard deduction.
Do not include on line 6 the deduction for
personal exemptions for you, your spouse, or
your dependents.
Do not enter business deductions on line 6.
These are deductions that are connected to
your trade or business. They include the follow-
ing.
State income tax on income attributable to
trade or business (including wages, salary,
and unemployment compensation).
Moving expenses.
Educator expenses.
The deduction for the deductible part of
self-employed health insurance.
Domestic production activities deduction.
Rental losses.
Loss on the sale or exchange of business
real estate or depreciable property.
Your share of a business loss from a part-
nership or an S corporation.
Ordinary loss on the sale or exchange of
stock in a small business corporation or a
small business investment company.
If you itemize your deductions, casualty
and theft losses (even if they involve non-
business property) and employee business
expenses (such as union dues, uniforms,
tools, education expenses, and travel and
transportation expenses).
Loss on the sale of accounts receivable (if
you use an accrual method of accounting).
Interest and litigation expenses on state
and federal income taxes related to your
business.
Unrecovered investment in a pension or
annuity claimed on a decedent's final re-
turn.
Payment by a federal employee to buy
back sick leave used in an earlier year.
Nonbusiness income (line 7). Enter on
line 7 only income that is not related to your
trade or business or your employment. For
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Page 2 Publication 536 (2016)
example, enter your annuity income, dividends,
and interest on investments. Also, include your
share of nonbusiness income from partnerships
and S corporations.
Do not include on line 7 the income you re-
ceive from your trade or business or your em-
ployment. This includes salaries and wages,
self-employment income, unemployment com-
pensation included in your gross income, and
your share of business income from partner-
ships and S corporations. Also, do not include
rental income or ordinary gain from the sale or
other disposition of business real estate or de-
preciable business property.
Adjustment for section 1202 exclusion
(line 17). Enter on line 17 any gain you exclu-
ded under section 1202 on the sale or ex-
change of qualified small business stock.
Adjustments for capital losses (lines 19–
22). The amount deductible for capital losses is
limited based on whether the losses are busi-
ness capital losses or nonbusiness capital los-
ses.
Nonbusiness capital losses. You can de-
duct your nonbusiness capital losses (line 2)
only up to the amount of your nonbusiness capi-
tal gains without regard to any section 1202 ex-
clusion (line 3). If your nonbusiness capital los-
ses are more than your nonbusiness capital
gains without regard to any section 1202 exclu-
sion, you cannot deduct the excess.
Business capital losses. You can deduct
your business capital losses (line 11) only up to
the total of:
Your nonbusiness capital gains that are
more than the total of your nonbusiness
capital losses and excess nonbusiness de-
ductions (line 10), and
Your total business capital gains without
regard to any section 1202 exclusion
(line 12).
Domestic production activities deduction
(line 23). You cannot take the domestic pro-
duction activities deduction when figuring your
NOL. Enter on line 23 any domestic production
activities deduction claimed on your return.
NOLs from other years (line 24). You cannot
deduct any NOL carryovers or carrybacks from
other years. Enter the total amount of your NOL
deduction for losses from other years.
Form 1045, Schedule A
Example
The following example describes how to figure
an NOL.
Example. Glenn Johnson is in the retail re-
cord business. He is single and has the follow-
ing income and deductions on his Form 1040
for 2016.
INCOME
Wages from part-time job ............. $1,225
Interest on savings .................. 425
Net long-term capital gain on sale of real
estate used in business ............... 2,000
Glenn's total income $3,650
DEDUCTIONS
Net loss from business (gross income of
$67,000 minus expenses of $72,000) .... $5,000
Net short-term capital loss
on sale of stock .................... 1,000
Standard deduction ................. 6,300
Personal exemption ................ 4,050
Glenn's total deductions $16,350
Glenn's deductions exceed his income by
$12,700 ($16,350 − $3,650). However, to figure
whether he has an NOL, certain deductions are
not allowed. He uses Form 1045, Schedule A,
to figure his NOL.
The following items are not allowed on Form
1045, Schedule A.
Nonbusiness net short-term capital loss .... $1,000
Nonbusiness deductions
(standard deduction, $6,300) minus
nonbusiness income (interest, $425) ....... 5,875
Deduction for personal exemption ........ 4,050
Total adjustments to net loss $10,925
Therefore, Glenn's NOL for 2016 is figured
as follows.
Glenn's total 2016 income ............ $3,650
Less:
Glenn's original 2016 total
deductions ............. $16,350
Reduced by the disallowed
items ................ − 10,925 − 5,425
Glenn's NOL for 2016 ............... $1,775
When To Use an NOL
Generally, if you have an NOL for a tax year
ending in 2016, you must carry back the entire
amount of the NOL to the 2 tax years before the
NOL year (the carryback period), and then carry
forward any remaining NOL for up to 20 years
after the NOL year (the carryforward period).
You can, however, choose not to carry back an
NOL and only carry it forward. See Waiving the
Carryback Period, later. You cannot deduct any
part of the NOL remaining after the 20-year car-
ryforward period.
NOL year. This is the year in which the NOL
occurred.
Exceptions to 2-Year
Carryback Rule
Eligible losses, farming losses, qualified disas-
ter losses, and specified liability losses, all de-
fined next, qualify for longer carryback periods.
Eligible loss. The carryback period for eligible
losses is 3 years. Only the eligible loss portion
of the NOL can be carried back 3 years. An eli-
gible loss is any part of an NOL that:
Is from a casualty or theft, or
Is attributable to a federally declared disas-
ter for a qualified small business or certain
qualified farming businesses.
Qualified small business. A qualified
small business is a sole proprietorship or a part-
nership that has average annual gross receipts
(reduced by returns and allowances) of $5 mil-
lion or less during the 3-year period ending with
the tax year of the NOL. If the business did not
exist for this entire 3-year period, use the period
the business was in existence.
An eligible loss does not include a farming
loss or a qualified disaster loss.
Farming loss. The carryback period for a
farming loss is 5 years. Only the farming loss
portion of the NOL can be carried back 5 years.
A farming loss is the smaller of:
1. The amount that would be the NOL for the
tax year if only income and deductions at-
tributable to farming businesses were
taken into account, or
2. The NOL for the tax year.
Farming business. A farming business is
a trade or business involving cultivation of land
or the raising or harvesting of any agricultural or
horticultural commodity. A farming business
can include operating a nursery or sod farm or
raising or harvesting most ornamental trees or
trees bearing fruit, nuts, or other crops. The
raising, shearing, feeding, caring for, training,
and management of animals is also considered
a farming business.
A farming business does not include con-
tract harvesting of an agricultural or horticultural
commodity grown or raised by someone else. It
also does not include a business in which you
merely buy or sell plants or animals grown or
raised entirely by someone else.
Waiving the 5-year carryback. You can
choose to figure the carryback period for a
farming loss without regard to the special 5-year
carryback rule. To make this choice for 2016,
attach to your 2016 income tax return filed by
the due date (including extensions) a statement
that you are choosing to treat any 2016 farming
losses without regard to the special 5-year car-
ryback rule. If you filed your original return on
time but did not file the statement with it, you
can make this choice on an amended return
filed within 6 months after the due date of the
return (excluding extensions). Attach an elec-
tion statement to your amended return, and
write “Filed pursuant to section 301.9100-2” at
the top of the statement. Once made, this
choice is irrevocable.
Qualified disaster loss. The carryback period
for a qualified disaster loss is 5 years. Only the
qualified disaster loss portion of the NOL can
be carried back 5 years. A qualified disaster
loss is the smaller of:
1. The sum of:
a. Any losses attributable to a federally
declared disaster and occurring be-
fore January 1, 2010, in the disaster
area, plus
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Publication 536 (2016) Page 3
b. Any qualified disaster expenses that
were allowable under section 198A
(even if you did not choose to treat
those expenses as deductions in the
current year), or
2. The NOL for the tax year.
Excluded losses. A qualified disaster loss
does not include any losses from property used
in connection with any private or commercial
golf course, country club, massage parlor, hot
tub facility, suntan facility, or any store for which
the principal business is the sale of alcoholic
beverages for consumption off premises.
A qualified disaster loss also does not in-
clude any losses from any gambling or animal
racing property. Gambling or animal racing
property is any equipment, furniture, software,
or other property used directly in connection
with gambling, the racing of animals, or the
on-site viewing of such racing, and the portion
of any real property (determined by square foot-
age) that is dedicated to gambling, the racing of
animals, or the on-site viewing of such racing,
unless this portion is less than 100 square feet.
Specified liability loss. The carryback period
for a specified liability loss is 10 years. Only the
specified liability loss portion of the NOL can be
carried back 10 years. Generally, a specified li-
ability loss is a loss arising from:
Product liability and expenses incurred in
the investigation or settlement of, or oppo-
sition to, product liability claims, or
An act (or failure to act) that occurred at
least 3 years before the beginning of the
loss year and resulted in a liability under a
federal or state law requiring:
1. Reclamation of land,
2. Dismantling of a drilling platform,
3. Remediation of environmental contamina-
tion, or
4. Payment under any workers’ compensa-
tion act.
Any loss from a liability arising from (1)
through (4) above can be taken into account as
a specified liability loss only if you used an ac-
crual method of accounting throughout the pe-
riod in which the act (or failure to act) occurred.
For details, see section 172(f).
Waiving the 10-year carryback. You can
choose to figure the carryback period for a
specified liability loss without regard to the spe-
cial 10-year carryback rule. To make this choice
for 2016, attach to your 2016 income tax return
filed by the due date (including extensions) a
statement that you are choosing to treat any
2016 specified liability losses without regard to
the special 10-year carryback rule. If you filed
your original return on time but did not file the
statement with it, you can make this choice on
an amended return filed within 6 months after
the due date of the return (excluding exten-
sions). Attach a statement to your amended re-
turn and write “Filed pursuant to section
301.9100-2” at the top of the statement. Once
made, this choice is irrevocable.
Waiving the Carryback
Period
You can choose not to carry back your NOL. If
you make this choice, then you can use your
NOL only in the 20-year carryforward period.
(This choice means you also choose not to
carry back any alternative tax NOL.)
To make this choice, attach a statement to
your original return filed by the due date (includ-
ing extensions) for the NOL year. This state-
ment must show that you are choosing to waive
the carryback period under section 172(b)(3).
If you filed your original return on time but
did not file the statement with it, you can make
this choice on an amended return filed within 6
months of the due date of the return (excluding
extensions). Attach a statement to your amen-
ded return, and write “Filed pursuant to section
301.9100-2” at the top of the statement.
Once you choose to waive the carryback pe-
riod, it generally is irrevocable. If you choose to
waive the carryback period for more than one
NOL, you must make a separate choice and at-
tach a separate statement for each NOL year.
If you do not file this statement on time,
you cannot waive the carryback period.
How To Carry an NOL Back
or Forward
If you choose to carry back the NOL, you must
first carry the entire NOL to the earliest carry-
back year. If your NOL is not used up, you can
carry the rest to the next earliest carryback
year, and so on.
If you waive the carryback period or do not
use up the NOL in the carryback period, carry
forward what remains of the NOL to the 20 tax
years following the NOL year. Start by carrying
it to the first tax year after the NOL year. If you
do not use it up, carry the unused part to the
next year. Continue to carry any unused part of
the NOL forward until the NOL is used up or you
complete the 20-year carryforward period.
Example 1. You started your business as a
sole proprietor in 2016 and had a $42,000 NOL
for the year. No part of the NOL qualifies for the
3-year, 5-year, or 10-year carryback. You begin
using your NOL in 2014, the second year before
the NOL year, as shown in the following chart.
Year
Carryback/
Carryover
Unused
Loss
2014 ............... $42,000 $40,000
2015 ............... 40,000 37,000
2016 (NOL year)
2017 ............... 37,000 31,500
2018 ............... 31,500 22,500
2019 ............... 22,500 12,700
2020 ............... 12,700 4,000
2021 ............... 4,000 -0-
If your loss were larger, you could carry it
forward until the year 2036. If you still had an
CAUTION
!
unused 2016 carryforward after the year 2036,
you would not be allowed to deduct it.
Example 2. Assume the same facts as in
Example 1, except that $4,000 of the NOL is at-
tributable to a casualty loss and this loss quali-
fies for a 3-year carryback period. You begin
using the $4,000 in 2013. As shown in the fol-
lowing chart, $3,000 of this NOL is used in
2013. The remaining $1,000 is carried to 2014
with the $38,000 NOL that you must begin us-
ing in 2014.
Year
Carryback/
Carryover
Unused
Loss
2013 ............... $4,000 $1,000
2014 ............... 39,000 37,000
2015 ............... 37,000 34,000
2016 (NOL year)
2017 ............... 34,000 28,500
2018 ............... 28,500 19,500
2019 ............... 19,500 9,700
2020 ............... 9,700 1,000
2021 ............... 1,000 -0-
How To Claim
an NOL Deduction
If you have not already carried the NOL to an
earlier year, your NOL deduction is the total
NOL. If you carried the NOL to an earlier year,
your NOL deduction is the carried over NOL mi-
nus the NOL amount you used in the earlier
year or years.
If you carry more than one NOL to the same
year, your NOL deduction is the total of these
carrybacks and carryovers.
NOL resulting in no taxable income. If your
NOL is more than the taxable income of the
year you carry it to (figured before deducting the
NOL), you generally will have an NOL carryover
to the next year. See How To Figure an NOL
Carryover, later, to determine how much NOL
you have used and how much you carry to the
next year.
Deducting a Carryback
If you carry back your NOL, you can use either
Form 1045 or Form 1040X. You can get your re-
fund faster by using Form 1045, but you have a
shorter time to file it. You can use Form 1045 to
apply an NOL to all carryback years. If you use
Form 1040X, you must use a separate Form
1040X for each carryback year to which you ap-
ply the NOL.
Estates and trusts that do not file Form 1045
must file an amended Form 1041 (instead of
Form 1040X) for each carryback year to which
NOLs are applied. Use a copy of the appropri-
ate year's Form 1041, check the “Amended re-
turn” box, and follow the Form 1041 instructions
for amended returns. Include the NOL deduc-
tion with other deductions not subject to the 2%
limit (line 15a). Also, see the special procedures
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Page 4 Publication 536 (2016)
for filing an amended return due to an NOL car-
ryback, explained under Form 1040X, later.
Form 1045. You can apply for a quick refund
by filing Form 1045. This form results in a tenta-
tive adjustment of tax in the carryback year.
If the IRS refunds or credits an amount to
you from Form 1045 and later determines that
the refund or credit is too much, the IRS may
assess and collect the excess immediately.
Generally, you must file Form 1045 on or af-
ter the date you file your tax return for the NOL
year, but not later than one year after the end of
the NOL year. If the last day of the NOL year
falls on a Saturday, Sunday, or holiday, the form
will be considered timely if postmarked on the
next business day. For example, if you are a
calendar year taxpayer with a carryback from
2016 to 2014, you must file Form 1045 on or af-
ter the date you file your tax return for 2016, but
no later than January 2, 2018.
Form 1040X. If you do not file Form 1045, you
can file Form 1040X to get a refund of tax be-
cause of an NOL carryback. Generally, file
Form 1040X for the carryback year within 3
years after the due date, including extensions,
for filing the return for the NOL year. For exam-
ple, if you are a calendar year taxpayer, you
must generally file a claim for refund because of
an NOL carryback from 2014 by April 16, 2018
(3 years after the due date for the NOL return).
Filing Form 1040X does not extend
the carryback period. See When To
Use an NOL, earlier.
Attach a computation of your NOL using
Form 1045, Schedule A, and, if it applies, your
NOL carryover using Form 1045, Schedule B,
discussed later.
Refiguring your tax. To refigure your total tax
liability for a carryback year, first refigure your
adjusted gross income for that year. (On Form
1045, use lines 10 and 11 and the “After carry-
back” column for the applicable carryback
year.) Use your adjusted gross income after ap-
plying the NOL deduction to refigure income or
deduction items that are based on, or limited to,
a percentage of your adjusted gross income.
Refigure the following items.
1. The special allowance for passive activity
losses from rental real estate activities.
2. Taxable social security and tier 1 railroad
retirement benefits.
3. IRA deductions.
4. Excludable savings bond interest.
5. Excludable employer-provided adoption
benefits.
6. The student loan interest deduction.
7. The tuition and fees deduction.
If more than one of these items apply, refig-
ure them in the order listed above, using your
adjusted gross income after applying the NOL
deduction and any previous item. (Enter your
NOL deduction on Form 1045, line 10. On
line 11, using the “After carryback” column, en-
ter your adjusted gross income refigured after
applying the NOL deduction and after refiguring
any above items.)
CAUTION
!
Next, refigure your taxable income. (On
Form 1045, use lines 12 through 15 and the “Af-
ter carryback” column.) Use your refigured ad-
justed gross income (Form 1045, line 11, using
the “After carryback” column) to refigure certain
deductions and other items that are based on or
limited to a percentage of your adjusted gross
income. Refigure the following items.
The itemized deduction for medical expen-
ses.
The itemized deduction for qualified mort-
gage insurance premiums.
The itemized deduction for casualty los-
ses.
Miscellaneous itemized deductions subject
to the 2% limit.
The overall limit on itemized deductions
(does not apply to carryback years begin-
ning after December 31, 2009 and before
January 1, 2013).
The phaseout of the deduction for exemp-
tions (does not apply to carryback years
beginning after December 31, 2009, and
before January 1, 2013).
Do not refigure the itemized deduction
for charitable contributions.
Finally, use your refigured taxable income
(Form 1045, line 15, using the “After carryback”
column) to refigure your total tax liability. Refig-
ure your income tax, your alternative minimum
tax, and any credits that are based on or limited
by your adjusted gross income (AGI), modified
adjusted gross income (MAGI), or tax liability.
(On Form 1045, use lines 16 through 30, and
the “After carryback” column.) The earned in-
come credit, for example, may be affected by
changes to adjusted gross income or the
amount of tax (or both) and, therefore, must be
recomputed. If you become eligible for a credit
because of the carryback, complete the form for
that specific credit (such as the EIC Worksheet)
for that year.
While it is necessary to refigure your income
tax, alternative minimum tax, and credits, do not
refigure your self-employment tax and addi-
tional medicare tax. For information about refi-
guring your net investment income tax, shared
responsibility payment, and credits, see the In-
structions for Form 1045.
Deducting a Carryforward
If you carry forward your NOL to a tax year after
the NOL year, list your NOL deduction as a
negative figure on the “Other income” line of
Form 1040 or Form 1040NR (line 21 for 2016).
Estates and trusts include an NOL deduction on
Form 1041 with other deductions not subject to
the 2% limit (line 15a for 2016).
You must attach a statement that shows all
the important facts about the NOL. Your state-
ment should include a computation showing
how you figured the NOL deduction. If you de-
duct more than one NOL in the same year, your
statement must cover each of them.
Change in Marital Status
If you and your spouse were not married to
each other in all years involved in figuring NOL
CAUTION
!
carrybacks and carryovers, only the spouse
who had the loss can take the NOL deduction. If
you file a joint return, the NOL deduction is limi-
ted to the income of that spouse.
For example, if your marital status changes
because of death or divorce, and in a later year
you have an NOL, you can carry back that loss
only to the part of the income reported on the
joint return (filed with your former spouse) that
was related to your taxable income. After you
deduct the NOL in the carryback year, the joint
rates apply to the resulting taxable income.
Refund limit. If you are not married in the NOL
year (or are married to a different spouse), and
in the carryback year you were married and
filed a joint return, your refund for the overpaid
joint tax may be limited. You can claim a refund
for the difference between your share of the re-
figured tax and your contribution toward the tax
paid on the joint return. The refund cannot be
more than the joint overpayment. Attach a
statement showing how you figured your re-
fund.
Figuring your share of a joint tax liabil-
ity. There are five steps for figuring your share
of the refigured joint tax liability.
1. Figure your total tax as though you had
filed as married filing separately.
2. Figure your spouse's total tax as though
your spouse also had filed as married filing
separately.
3. Add the amounts in (1) and (2).
4. Divide the amount in (1) by the amount in
(3).
5. Multiply the refigured tax on your joint re-
turn by the amount figured in (4). This is
your share of the joint tax liability.
Figuring your contribution toward tax
paid. Unless you have an agreement or clear
evidence of each spouse's contributions toward
the payment of the joint tax liability, figure your
contribution by adding the tax withheld on your
wages and your share of joint estimated tax
payments or tax paid with the return. If the origi-
nal return for the carryback year resulted in an
overpayment, reduce your contribution by your
share of the tax refund. Figure your share of a
joint payment or refund by the same method
used in figuring your share of the joint tax liabil-
ity. Use your taxable income as originally repor-
ted on the joint return in steps (1) and (2)
above, and substitute the joint payment or re-
fund for the refigured joint tax in step (5).
Change in Filing Status
If you and your spouse were married and filed a
joint return for each year involved in figuring
NOL carrybacks and carryovers, figure the NOL
deduction on a joint return as you would for an
individual. However, treat the NOL deduction as
a joint NOL.
If you and your spouse were married and
filed separate returns for each year involved in
figuring NOL carrybacks and carryovers, the
spouse who sustained the loss may take the
NOL deduction on a separate return.
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Publication 536 (2016) Page 5
Special rules apply for figuring the NOL car-
rybacks and carryovers of married people
whose filing status changes for any tax year in-
volved in figuring an NOL carryback or carry-
over.
Separate to joint return. If you and your
spouse file a joint return for a carryback or car-
ryforward year, and were married but filed sep-
arate returns for any of the tax years involved in
figuring the NOL carryback or carryover, treat
the separate carryback or carryover as a joint
carryback or carryover.
Joint to separate returns. If you and your
spouse file separate returns for a carryback or
carryforward year, but filed a joint return for any
or all of the tax years involved in figuring the
NOL carryover, figure each of your carryovers
separately.
Joint return in NOL year. Figure each
spouse's share of the joint NOL through the fol-
lowing steps.
1. Figure each spouse's NOL as if he or she
filed a separate return. See How To Figure
an NOL, earlier. If only one spouse has an
NOL, stop here. All of the joint NOL is that
spouse's NOL.
2. If both spouses have an NOL, multiply the
joint NOL by a fraction, the numerator of
which is spouse A's NOL figured in (1) and
the denominator of which is the total of the
spouses' NOLs figured in (1). The result is
spouse A's share of the joint NOL. The
rest of the joint NOL is spouse B's share.
Example 1. Mark and Nancy are married
and file a joint return for 2016. They have an
NOL of $5,000. They carry the NOL back to
2014, a year in which Mark and Nancy filed
separate returns. Figured separately, Nancy's
2016 deductions were more than her income,
and Mark's income was more than his deduc-
tions. Mark does not have any NOL to carry
back. Nancy can carry back the entire $5,000
NOL to her 2014 separate return.
Example 2. Assume the same facts as in
Example 1, except that both Mark and Nancy
had deductions in 2016 that were more than
their income. Figured separately, his NOL is
$1,800 and her NOL is $3,000. The sum of their
separate NOLs ($4,800) is less than their
$5,000 joint NOL because his deductions inclu-
ded a $200 net capital loss that is not allowed in
figuring his separate NOL. The loss is allowed
in figuring their joint NOL because it was offset
by Nancy's capital gains. Mark's share of their
$5,000 joint NOL is $1,875 ($5,000 ×
$1,800/$4,800) and Nancy's is $3,125 ($5,000
− $1,875).
Joint return in previous carryback or
carryforward year. If only one spouse had an
NOL deduction on the previous year's joint re-
turn, all of the joint carryover is that spouse's
carryover. If both spouses had an NOL deduc-
tion (including separate carryovers of a joint
NOL, figured as explained in the previous dis-
cussion), figure each spouse's share of the joint
carryover through the following steps.
1. Figure each spouse's modified taxable in-
come as if he or she filed a separate re-
turn. See Modified taxable income under
How To Figure an NOL Carryover, later.
2. Multiply the joint modified taxable income
you used to figure the joint carryover by a
fraction, the numerator of which is spouse
A's modified taxable income figured in (1)
and the denominator of which is the total
of the spouses' modified taxable incomes
figured in (1). This is spouse A's share of
the joint modified taxable income.
3. Subtract the amount figured in (2) from the
joint modified taxable income. This is
spouse B's share of the joint modified tax-
able income.
4. Reduce the amount figured in (3), but not
below zero, by spouse B's NOL deduction.
5. Add the amounts figured in (2) and (4).
6. Subtract the amount figured in (5) from
spouse A's NOL deduction. This is spouse
A's share of the joint carryover. The rest of
the joint carryover is spouse B's share.
Example. Sam and Wanda filed a joint re-
turn for 2014 and separate returns for 2015 and
2016. In 2016, Sam had an NOL of $18,000
and Wanda had an NOL of $2,000. They
choose to carry back both NOLs 2 years to their
2014 joint return and claim a $20,000 NOL de-
duction.
Their joint modified taxable income (MTI) for
2014 is $15,000, and their joint NOL carryover
to 2015 is $5,000 ($20,000 – $15,000). Sam
and Wanda each figure their separate MTI for
2014 as if they had filed separate returns. Then
they figure their shares of the $5,000 carryover
as follows.
Step 1.
Sam's separate MTI ............... $9,000
Wanda's separate MTI ............. + 3,000
Total MTI ...................... $12,000
Step 2.
Joint MTI ...................... $15,000
Sam's MTI ÷ total MTI
($9,000 ÷ $12,000) ............... × .75
Sam's share of joint MTI ............ $11,250
Step 3.
Joint MTI ...................... $15,000
Sam's share of joint MTI ............ − 11,250
Wanda's share of joint MTI .......... $3,750
Step 4.
Wanda's share of joint MTI .......... $3,750
Wanda's NOL deduction ........... − 2,000
Wanda's remaining share ........... $1,750
Step 5.
Sam's share of joint MTI ............ $11,250
Wanda's remaining share ........... + 1,750
Joint MTI to be offset .............. $13,000
Step 6.
Sam's NOL deduction ............. $18,000
Joint MTI to be offset .............. − 13,000
Sam's carryover to 2015 ............ $5,000
Joint carryover to 2015 ............. $5,000
Sam's carryover ................. − 5,000
Wanda's carryover to 2015 .......... $-0-
Wanda's $2,000 NOL deduction offsets
$2,000 of her $3,750 share of the joint modified
taxable income and is completely used up. She
has no carryover to 2015. Sam's $18,000 NOL
deduction offsets all of his $11,250 share of
joint modified taxable income and the remaining
$1,750 of Wanda's share. His carryover to 2015
is $5,000.
How To Figure an NOL
Carryover
If your NOL is more than your taxable income
for the year to which you carry it (figured before
deducting the NOL), you may have an NOL car-
ryover. You must make certain modifications to
your taxable income to determine how much
NOL you will use up in that year and how much
you can carry over to the next tax year. Your
carryover is the excess of your NOL deduction
over your modified taxable income for the carry-
back or carryforward year. If your NOL deduc-
tion includes more than one NOL, apply the
NOLs against your modified taxable income in
the same order in which you incurred them,
starting with the earliest.
Modified taxable income. Your modified tax-
able income is your taxable income figured with
the following changes.
1. You cannot claim an NOL deduction for
the NOL carryover you are figuring or for
any later NOL.
2. You cannot claim a deduction for capital
losses in excess of your capital gains.
Also, you must increase your taxable in-
come by the amount of any section 1202
exclusion.
3. You cannot claim the domestic production
activities deduction.
4. You cannot claim a deduction for your ex-
emptions for yourself, your spouse, or de-
pendents.
5. You must figure any item affected by the
amount of your adjusted gross income af-
ter making the changes in (1), (2), and (3),
above, and certain other changes to your
adjusted gross income that result from (1),
(2), and (3). This includes income and de-
duction items used to figure adjusted
gross income (for example, IRA deduc-
tions), as well as certain itemized deduc-
tions. To figure a charitable contribution
deduction, do not include deductions for
NOL carrybacks in the change in (1) but
do include deductions for NOL carryfor-
wards from tax years before the NOL year.
Your taxable income as modified cannot be
less than zero.
Form 1045, Schedule B. You can use Form
1045, Schedule B, to figure your modified taxa-
ble income for carryback years and your carry-
over from each of those years. Do not use Form
1045, Schedule B, for a carryforward year. If
your 2016 return includes an NOL deduction
from an NOL year before 2016 that reduced
your taxable income to zero (to less than zero, if
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Page 6 Publication 536 (2016)
an estate or trust), see NOL Carryover From
2016 to 2017, later.
NOL Carryover From
2016 to 2017
If you had an NOL deduction carried forward
from a year prior to 2016 that resulted in your
having taxable income on your 2016 return of
zero (of less than zero, if an estate or trust),
complete Table 1, Worksheet for NOL Carry-
over From 2016 to 2017, on the following pa-
ges. It will help you figure your NOL to carry to
2017. Keep the worksheet for your records.
Worksheet Instructions
At the top of the worksheet, enter the NOL year
for which you are figuring the carryover.
More than one NOL. If your 2016 NOL deduc-
tion includes amounts for more than one loss
year, complete this worksheet only for one loss
year. To determine which year, start with your
earliest NOL and subtract each NOL separately
from your taxable income figured without the
NOL deduction. Complete this worksheet for
the earliest NOL that results in your having tax-
able income below zero. Your NOL carryover to
2017 is the total of the amount on line 10 of the
worksheet and all later NOL amounts.
Example. Your taxable income for 2016 is
$5,000 without your $9,000 NOL deduction.
Your NOL deduction includes a $2,000 carry-
over from 2014 and a $7,000 carryover from
2015. Subtract your 2014 NOL of $2,000 from
$5,000. This gives you taxable income of
$3,000. Your 2014 NOL is now completely used
up. Subtract your $7,000 2015 NOL from
$3,000. This gives you taxable income of
($4,000). You now complete the worksheet for
your 2015 NOL. Your NOL carryover to 2017 is
the unused part of your 2015 NOL from line 10
of the worksheet.
Line 2. Treat your NOL deduction for the NOL
year entered at the top of the worksheet and
later years as a positive amount. Add it to your
negative taxable income (figured without the
NOL deduction). Enter the result on line 2.
Line 6. You must refigure the following income
and deductions based on adjusted gross in-
come.
1. The special allowance for passive activity
losses from rental real estate activities.
2. Taxable social security and tier 1 railroad
retirement benefits.
3. IRA deductions.
4. Excludable savings bond interest.
5. Excludable employer-provided adoption
benefits.
6. The student loan interest deduction.
7. The tuition and fees deduction.
If none of these items apply to you, enter
zero on line 6. Otherwise, increase your
adjusted gross income by the total of lines 3
through 5 and your NOL deduction for the NOL
year entered at the top of the worksheet and
later years. Using this increased adjusted gross
income, refigure the items that apply, in the or-
der listed above. Your adjustment for each item
is the difference between the refigured amount
and the amount included on your return. Com-
bine the adjustments for previous items with
your adjusted gross income before refiguring
the next item. Keep a record of your computa-
tions.
Enter your total adjustments for the above
items on line 6.
Line 7. Enter zero if you claimed the standard
deduction and the amounts on lines 3 through 5
are zero. Otherwise, use lines 11 through 33 of
the worksheet to figure the amount to enter on
this line. Complete only those sections that ap-
ply to you.
Estates and trusts. Enter zero on line 7 if
you did not claim any miscellaneous deductions
on Form 1041, line 15c, or a casualty or theft
loss. Otherwise, refigure these deductions by
substituting modified adjusted gross income
(see below) for adjusted gross income. Subtract
the recomputed deductions from those claimed
on the return. Enter the result on line 7.
Modified adjusted gross income. To re-
figure miscellaneous itemized deductions of an
estate or trust (Form 1041, line 15c), modified
adjusted gross income is the total of the follow-
ing amounts.
The adjusted gross income on the return.
The amounts from lines 3 through 5 of the
worksheet.
The exemption amount from Form 1041,
line 20.
The NOL deduction for the NOL year en-
tered at the top of the worksheet and for
later years.
To refigure the casualty and theft loss de-
duction of an estate or trust, modified adjusted
gross income is the total of the following
amounts.
The adjusted gross income amount you
used to figure the deduction claimed on
the return.
The amounts from lines 3 through 5 of the
worksheet.
The NOL deduction for the NOL year en-
tered at the top of the worksheet and for
later years.
Line 11. Treat your NOL deduction for the NOL
year entered at the top of the worksheet and for
later years as a positive amount. Add it to your
adjusted gross income. Enter the result on
line 11.
Line 20. Is your modified adjusted gross in-
come from line 13 of this worksheet more than
$100,000 ($50,000 if married filing separately)?
Yes. Your deduction is limited. Refigure
your deduction using the Mortgage Insurance
Premiums Deduction Worksheet in the 2015 In-
structions for Form 1045. On line 2 of the Mort-
gage Insurance Premiums Deduction Work-
sheet, enter the amount from line 13 of this
worksheet.
No. Your deduction is not limited. Enter
the amount from line 19 on line 20 and enter -0-
on line 21.
Line 23. If you had a contributions carryover
from 2015 to 2016 and your NOL deduction in-
cludes an amount from an NOL year before
2015, you may have to reduce your contribu-
tions carryover. Reduce the contributions carry-
over by the amount of any adjustment you
made to your 2015 charitable contributions de-
duction when figuring your NOL carryover to
2016. Use the reduced contributions carryover
to figure the amount to enter on line 23.
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Publication 536 (2016) Page 7
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Page 8 Publication 536 (2016)
How To Get Tax Help
If you have questions about a tax issue, need
help preparing your tax return, or want to down-
load free publications, forms, or instructions, go
to IRS.gov and find resources that can help you
right away.
Preparing and filing your tax return. Find
free options to prepare and file your return on
IRS.gov or in your local community if you qual-
ify.
The Volunteer Income Tax Assistance
(VITA) program offers free tax help to people
who generally make $54,000 or less, persons
with disabilities, the elderly, and limited-Eng-
lish-speaking taxpayers who need help prepar-
ing their own tax returns. The Tax Counseling
for the Elderly (TCE) program offers free tax
help for all taxpayers, particularly those who are
60 years of age and older. TCE volunteers spe-
cialize in answering questions about pensions
and retirement-related issues unique to seniors.
You can go to IRS.gov and click on the Fil-
ing tab to see your options for preparing and fil-
ing your return which include the following.
Free File. Go to IRS.gov/freefile. See if
you qualify to use brand-name software to
prepare and efile your federal tax return
for free.
VITA. Go to IRS.gov/vita, download the
free IRS2Go app, or call 1-800-906-9887
to find the nearest VITA location for free
tax preparation.
TCE. Go to IRS.gov/tce, download the free
IRS2Go app, or call 1-888-227-7669 to
find the nearest TCE location for free tax
preparation.
Getting answers to your tax law
questions. On IRS.gov get answers to
your tax questions anytime, anywhere.
Go to IRS.gov/help or IRS.gov/letushelp
pages for a variety of tools that will help
you get answers to some of the most com-
mon tax questions.
Go to IRS.gov/ita for the Interactive Tax
Assistant, a tool that will ask you questions
on a number of tax law topics and provide
answers. You can print the entire interview
and the final response for your records.
Go to IRS.gov/pub17 to get Pub. 17, Your
Federal Income Tax for Individuals, which
features details on tax-saving opportuni-
ties, 2016 tax changes, and thousands of
interactive links to help you find answers to
your questions. View it online in HTML or
as a PDF or, better yet, download it to your
mobile device to enjoy eBook features.
You may also be able to access tax law in-
formation in your electronic filing software.
Getting tax forms and publications. Go to
IRS.gov/forms to view, download, or print all of
the forms and publications you may need. You
can also download and view popular tax publi-
cations and instructions (including the 1040 in-
structions) on mobile devices as an eBook at no
charge. Or, you can go to IRS.gov/orderforms
to place an order and have forms mailed to you
within 10 business days.
Using direct deposit. The fastest way to re-
ceive a tax refund is to combine direct deposit
and IRS efile. Direct deposit securely and elec-
tronically transfers your refund directly into your
financial account. Eight in 10 taxpayers use di-
rect deposit to receive their refund. IRS issues
more than 90% of refunds in less than 21 days.
Delayed refund for returns claiming certain
credits. Due to changes in the law, the IRS
can’t issue refunds before February 15, 2017,
for returns that claim the earned income credit
(EIC) or the additional child tax credit (ACTC).
This applies to the entire refund, not just the
portion associated with these credits.
Getting a transcript or copy of a return. The
quickest way to get a copy of your tax transcript
is to go to IRS.gov/transcripts. Click on either
"Get Transcript Online" or "Get Transcript by
Mail" to order a copy of your transcript. If you
prefer, you can:
Order your transcript by calling
1-800-908-9946.
Mail Form 4506-T or Form 4506T-EZ (both
available on IRS.gov).
Using online tools to help prepare your re-
turn. Go to IRS.gov/tools for the following.
The Earned Income Tax Credit Assistant
(IRS.gov/eic) determines if you are eligible
for the EIC.
The Online EIN Application (IRS.gov/ein)
helps you get an employer identification
number.
The IRS Withholding Calculator (IRS.gov/
w4app) estimates the amount you should
have withheld from your paycheck for fed-
eral income tax purposes.
The First Time Homebuyer Credit Account
Lookup (IRS.gov/homebuyer) tool
34.
35.
36.
40.
37.
38.
41.
43.
39.
42.
Table 1. (Continued)
TENTATIVE TOTAL ADJUSTMENT:
33. Combine lines 18, 21, 24, 27, and 32, and enter the result here. If line 13 above is $311,300 or less if
married ling jointly or qualifying widow(er), $285,350 or less if head of household, $259,400 or less if
single, or $155,650 or less if married ling separately, also enter the result on line 7 above and stop
here. Otherwise, go to line 34
ADJUSTMENT TO OVERALL ITEMIZED LIMIT:
Enter the amount from Schedule A (Form 1040), line 29, or Schedule A (Form 1040NR), line 15
Add lines 17, 20, 23, 26, and 31, and the amounts on Schedule A (Form 1040), lines 9, 10, 11, 12,
14, and 28, or the amounts from Schedule A (Form 1040NR), lines 1 and 14
Add lines 17 and 27, the amount on Schedule A (Form 1040), line 14, and any gambling and
casualty or theft losses included on Schedule A (Form 1040), line 28, or Schedule A (Form
1040NR), line 14
Multiply line 39 by 3% (0.03)
Subtract line 36 from line 35. If the result is zero, enter the amount from line 33 on line 7 above
and stop here. Otherwise, go to line 38
Multiply line 37 by 80% (0.80)
Enter the smaller of line 38 or line 40
Subtract $311,300 if married ling jointly or qualifying widow(er), $285,350 if head of household,
$259,400 if single, or $155,650 if married ling separately from the amount on line 13
Subtract line 41 from line 35. Enter the result (but not less than your standard deduction amount)
Subtract line 42 from line 34. Enter the result here and on line 7
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Publication 536 (2016) Page 9
provides information on your repayments
and account balance.
The Sales Tax Deduction Calculator
(IRS.gov/salestax) figures the amount you
can claim if you itemize deductions on
Schedule A (Form 1040), choose not to
claim state and local income taxes, and
you didn’t save your receipts showing the
sales tax you paid.
Resolving tax-related identity theft issues.
The IRS doesn’t initiate contact with tax-
payers by email or telephone to request
personal or financial information. This in-
cludes any type of electronic communica-
tion, such as text messages and social me-
dia channels.
Go to IRS.gov/idprotection for information
and videos.
If your SSN has been lost or stolen or you
suspect you are a victim of tax-related
identity theft, visit IRS.gov/id to learn what
steps you should take.
Checking on the status of your refund.
Go to IRS.gov/refunds.
Due to changes in the law, the IRS can’t is-
sue refunds before February 15, 2017, for
returns that claim the EIC or the ACTC.
This applies to the entire refund, not just
the portion associated with these credits.
Download the official IRS2Go app to your
mobile device to check your refund status.
Call the automated refund hotline at
1-800-829-1954.
Making a tax payment. The IRS uses the lat-
est encryption technology to ensure your elec-
tronic payments are safe and secure. You can
make electronic payments online, by phone,
and from a mobile device using the IRS2Go
app. Paying electronically is quick, easy, and
faster than mailing in a check or money order.
Go to IRS.gov/payments to make a payment
using any of the following options.
IRS Direct Pay: Pay your individual tax bill
or estimated tax payment directly from
your checking or savings account at no
cost to you.
Debit or credit card: Choose an ap-
proved payment processor to pay online,
by phone, and by mobile device.
Electronic Funds Withdrawal: Offered
only when filing your federal taxes using
tax preparation software or through a tax
professional.
Electronic Federal Tax Payment Sys-
tem: Best option for businesses. Enroll-
ment is required.
Check or money order: Mail your pay-
ment to the address listed on the notice or
instructions.
Cash: If cash is your only option, you may
be able to pay your taxes at a participating
retail store.
What if I can’t pay now? Go to IRS.gov/
payments for more information about your op-
tions.
Apply for an online payment agreement
(IRS.gov/opa) to meet your tax obligation
in monthly installments if you can’t pay
your taxes in full today. Once you complete
the online process, you will receive imme-
diate notification of whether your agree-
ment has been approved.
Use the Offer in Compromise PreQualifier
(IRS.gov/oic) to see if you can settle your
tax debt for less than the full amount you
owe.
Checking the status of an amended return.
Go to IRS.gov and click on Where’s My
Amended Return? (IRS.gov/wmar) under the
“Tools” bar to track the status of Form 1040X
amended returns. Please note that it can take
up to 3 weeks from the date you mailed your
amended return for it show up in our system
and processing it can take up to 16 weeks.
Understanding an IRS notice or letter. Go to
IRS.gov/notices to find additional information
about responding to an IRS notice or letter.
Contacting your local IRS office. Keep in
mind, many questions can be resolved on
IRS.gov without visiting an IRS Tax Assistance
Center (TAC). Go to IRS.gov/letushelp for the
topics people ask about most. If you still need
help, IRS TACs provide tax help when a tax is-
sue can’t be handled online or by phone. All
TACs now provide service by appointment so
you’ll know in advance that you can get the
service you need without waiting. Before you
visit, go to IRS.gov/taclocator to find the nearest
TAC, check hours, available services, and ap-
pointment options. Or, on the IRS2Go app, un-
der the Stay Connected tab, choose the Con-
tact Us option and click on “Local Offices.”
Watching IRS videos. The IRS Video portal
(IRSvideos.gov) contains video and audio pre-
sentations for individuals, small businesses,
and tax professionals.
Getting tax information in other languages.
For taxpayers whose native language isn’t Eng-
lish, we have the following resources available.
Taxpayers can find information on IRS.gov in
the following languages.
Spanish (IRS.gov/spanish).
Chinese (IRS.gov/chinese).
Vietnamese (IRS.gov/vietnamese).
Korean (IRS.gov/korean).
Russian (IRS.gov/russian).
The IRS TACs provide over-the-phone inter-
preter service in over 170 languages, and the
service is available free to taxpayers.
The Taxpayer Advocate
Service Is Here To Help You
What is the Taxpayer Advocate
Service?
The Taxpayer Advocate Service (TAS) is an in-
dependent organization within the IRS that
helps taxpayers and protects taxpayer rights.
Our job is to ensure that every taxpayer is
treated fairly and that you know and understand
your rights under the Taxpayer Bill of Rights.
What Can the Taxpayer Advocate
Service Do For You?
We can help you resolve problems that you
can’t resolve with the IRS. And our service is
free. If you qualify for our assistance, you will be
assigned to one advocate who will work with
you throughout the process and will do every-
thing possible to resolve your issue. TAS can
help you if:
Your problem is causing financial difficulty
for you, your family, or your business,
You face (or your business is facing) an
immediate threat of adverse action, or
You’ve tried repeatedly to contact the IRS
but no one has responded, or the IRS
hasn’t responded by the date promised.
How Can You Reach Us?
We have offices in every state, the District of
Columbia, and Puerto Rico. Your local advo-
cate’s number is in your local directory and at
taxpayeradvocate.irs.gov. You can also call us
at 1-877-777-4778.
How Can You Learn About Your
Taxpayer Rights?
The Taxpayer Bill of Rights describes 10 basic
rights that all taxpayers have when dealing with
the IRS. Our Tax Toolkit at
taxpayeradvocate.irs.gov can help you under-
stand what these rights mean to you and how
they apply. These are your rights. Know them.
Use them.
How Else Does the Taxpayer
Advocate Service Help Taxpayers?
TAS works to resolve large-scale problems that
affect many taxpayers. If you know of one of
these broad issues, please report it to us at
IRS.gov/sams.
Low Income Taxpayer
Clinics
Low Income Taxpayer Clinics (LITCs) serve in-
dividuals whose income is below a certain level
and need to resolve tax problems such as au-
dits, appeals, and tax collection disputes. Some
clinics can provide information about taxpayer
rights and responsibilities in different languages
for individuals who speak English as a second
language. To find a clinic near you, visit
IRS.gov/litc or see IRS Publication 4134, Low
Income Taxpayer Clinic List.
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Page 10 Publication 536 (2016)
To help us develop a more useful index, please let us know if you have ideas for index entries.
See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.
Index
A
Assistance (See Tax help)
C
Carryback, waiving 4
Carryback period 3
Carryforward period 3
Carryover from 2016 to 2017:
Estates and trusts 7
Worksheet instructions 7
Claiming an NOL deduction 4
D
Deducting a carryback 4
Deducting a carryforward 5
Domestic production activities
deduction 3, 6
E
Eligible loss 3
F
Farming business 3
Farming loss 3
Figuring an NOL:
Capital losses 3
Carryover 6
Form 1045, Schedule A 2
NOL deduction 3
Nonbusiness deductions 2
Nonbusiness income 2
Filing status, change in 5
Form 1045, Schedule A 2
Form 1045, Schedule B 6
Forms and schedules:
Form 1040X 5
Form 1045 5
Form 1045, Schedule A 2
Form 1045, Schedule B 6
Future developments 1
H
How to carry an NOL back or
forward 4
How to figure an NOL 2
I
Identity theft 10
M
Marital status, change in 5
Missing children, photographs
of 1
Modified taxable income 6
N
NOL resulting in no taxable
income 4
NOL year 1, 3
P
Publications (See Tax help)
Q
Qualified disaster loss 3
Qualified small business 3
R
Refiguring tax 5
S
Specified liability loss 4
Steps in figuring NOL 2
T
Tax help 9
W
Waiving the 10-year carryback 4
Waiving the 5-year carryback 3
Waiving the carryback period 4
When to use an NOL 3
Worksheet:
(Continued) 9
Carryover from 2016 to 2017 8
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Publication 536 (2016) Page 11

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