Instructions for Form NOL-F85A "Application of Net Operating Loss Carryback or Carryforward Fiduciary Return Form 41" - Alabama

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Instructions For Preparation of Alabama
Form NOL-F85A
Application of Net Operating Loss Carryback or Carryfor-
able income.” The modification required by law provides that no
ward – Fiduciary Return Form 41
deduction is allowed for the personal exemption provided in §40-
This form is used to determine the amount of a net operating
18-19. If a prior NOL carryback or carryover was fully absorbed in
loss (carried to the tax year from another tax year) that can be
the year, and a subsequent NOL is carried to the year and cannot
claimed as a net operating loss deduction during the tax year.
be fully absorbed, the modification required above would be com-
Additional guidance concerning the computation of the NOL,
puted after taxable income has been recomputed for the year. If
the carrying back of the NOL, and the carrying forward of the NOL,
the subsequent NOL can be fully absorbed, after taxable income
can be obtained from Alabama Income Tax Rule Number
has been recomputed for the prior NOL, taxable income for the
810-3-15.2-.01. Visit the Alabama Department of Revenue’s web-
year must be recomputed, with taxable income reduced again for
site (www.revenue. alabama. gov) to obtain copies of Alabama in-
the subsequent NOL.
Form Preparation
come tax forms, schedules, and form preparation instructions.
Carryback and Carryforward of an Alabama NOL. For loss
Enter the tax year information. Enter the name of the estate or
years beginning after December 31, 1997, an NOL may be car-
trust and the federal employer identification number of the estate
ried back and deducted from taxable income in each of the pre-
or trust.
ceding two years or until exhausted.
If this application is used for Schedule ESBT, please check the
NOL Carrybacks. When an NOL is carried back to a prior
box ESBT NOL. Use column ESBT from Schedule ESBT.
year, taxable income will be recomputed in such prior year. If the
Part I – Computation of Unused Net Operating Loss
NOL being carried back is equal to or greater than taxable income
Line 2. Enter the NOL as shown on line 17 of the Alabama
as previously reported or last adjusted (including any deductions
Form NOL-F85 for the tax year the loss was incurred. If the NOL
for NOLs carried over or carried back to such year from any loss
has previously been carried to a tax year, enter the amount from
year prior to the current loss year), taxable income will be reduced
line 4 of the Alabama Form NOL-F85A filed for the tax year to
to zero. If the NOL being carried back is less than taxable income
which the NOL was carried.
as previously reported or last adjusted (including any deductions
Line 3. Enter the Alabama Taxable Income from page 1, line
for NOLs carried over or carried back to such year from any loss
5, or Schedule ESBT, line 20 of the Alabama Form 41 for the tax
year prior to the current loss year), taxable income for the carry-
year to which the net operating loss is being carried.
back year is reduced by the amount of the NOL.
Line 4. If the amount entered on line 2 exceeds the amount en-
Application of an NOL Carryforward. An NOL may be car-
tered on line 3, enter on line 4 the amount that line 2 exceeds line
ried forward 15 tax years subsequent to the loss year in order of
3. Otherwise, enter zero.
time or until exhausted, whichever occurs first.
Part II – Application to Carryback of Carryforward Year
Computation of Taxable Income in a Carryforward Year. If
Line 5. Enter the Alabama Taxable Income from page 1, line
the NOL being carried forward is equal to or greater than taxable
5, or Schedule ESBT, line 20 of the Form 41 for the carryback or
income, taxable income will be reduced to zero. Taxable income is
carryforward tax year.
computed without considering the current NOL carryover to be ap-
Line 6. Enter the NOL to be applied to the carryback or carry-
plied, but will reflect any prior carryovers which have been applied.
forward tax year. If the amount on line 4 is zero, enter the amount
See Computation of Any Remaining NOL Carryover After Applica-
entered on line 2. Otherwise enter the amount that line 2 exceeds
tion of an NOL below for the computation of any remaining NOL for
the amount on line 4.
carryover to a subsequent year.
Line 7. Enter the Alabama Taxable Income after application of
If the NOL being carried forward is less than taxable income
NOL which equals the amount that line 5 exceeds the amount en-
(computed without considering the NOL deduction to be applied);
tered on line 6.
taxable income will be reduced (but not below zero) by the amount
Part III – Computation of Tax
of the NOL carried forward.
Complete lines 8 through 11 below to determine the correct
Computation of Any Remaining NOL Carryover After Ap-
plication of an NOL. In order to determine the amount of an NOL
tax due after application of the NOL. Line 10 will only apply to
ESBT.
available for carryover, an adjustment must be made to the tax-
The amount from line 11 must be carried forward to page 1, line
able income for the year in which the deduction was taken. The
6a of the Form 41, or Schedule ESBT, line 21.
amount by which the NOL will be reduced is called “modified tax-
Instructions For Preparation of Alabama
Form NOL-F85A
Application of Net Operating Loss Carryback or Carryfor-
able income.” The modification required by law provides that no
ward – Fiduciary Return Form 41
deduction is allowed for the personal exemption provided in §40-
This form is used to determine the amount of a net operating
18-19. If a prior NOL carryback or carryover was fully absorbed in
loss (carried to the tax year from another tax year) that can be
the year, and a subsequent NOL is carried to the year and cannot
claimed as a net operating loss deduction during the tax year.
be fully absorbed, the modification required above would be com-
Additional guidance concerning the computation of the NOL,
puted after taxable income has been recomputed for the year. If
the carrying back of the NOL, and the carrying forward of the NOL,
the subsequent NOL can be fully absorbed, after taxable income
can be obtained from Alabama Income Tax Rule Number
has been recomputed for the prior NOL, taxable income for the
810-3-15.2-.01. Visit the Alabama Department of Revenue’s web-
year must be recomputed, with taxable income reduced again for
site (www.revenue. alabama. gov) to obtain copies of Alabama in-
the subsequent NOL.
Form Preparation
come tax forms, schedules, and form preparation instructions.
Carryback and Carryforward of an Alabama NOL. For loss
Enter the tax year information. Enter the name of the estate or
years beginning after December 31, 1997, an NOL may be car-
trust and the federal employer identification number of the estate
ried back and deducted from taxable income in each of the pre-
or trust.
ceding two years or until exhausted.
If this application is used for Schedule ESBT, please check the
NOL Carrybacks. When an NOL is carried back to a prior
box ESBT NOL. Use column ESBT from Schedule ESBT.
year, taxable income will be recomputed in such prior year. If the
Part I – Computation of Unused Net Operating Loss
NOL being carried back is equal to or greater than taxable income
Line 2. Enter the NOL as shown on line 17 of the Alabama
as previously reported or last adjusted (including any deductions
Form NOL-F85 for the tax year the loss was incurred. If the NOL
for NOLs carried over or carried back to such year from any loss
has previously been carried to a tax year, enter the amount from
year prior to the current loss year), taxable income will be reduced
line 4 of the Alabama Form NOL-F85A filed for the tax year to
to zero. If the NOL being carried back is less than taxable income
which the NOL was carried.
as previously reported or last adjusted (including any deductions
Line 3. Enter the Alabama Taxable Income from page 1, line
for NOLs carried over or carried back to such year from any loss
5, or Schedule ESBT, line 20 of the Alabama Form 41 for the tax
year prior to the current loss year), taxable income for the carry-
year to which the net operating loss is being carried.
back year is reduced by the amount of the NOL.
Line 4. If the amount entered on line 2 exceeds the amount en-
Application of an NOL Carryforward. An NOL may be car-
tered on line 3, enter on line 4 the amount that line 2 exceeds line
ried forward 15 tax years subsequent to the loss year in order of
3. Otherwise, enter zero.
time or until exhausted, whichever occurs first.
Part II – Application to Carryback of Carryforward Year
Computation of Taxable Income in a Carryforward Year. If
Line 5. Enter the Alabama Taxable Income from page 1, line
the NOL being carried forward is equal to or greater than taxable
5, or Schedule ESBT, line 20 of the Form 41 for the carryback or
income, taxable income will be reduced to zero. Taxable income is
carryforward tax year.
computed without considering the current NOL carryover to be ap-
Line 6. Enter the NOL to be applied to the carryback or carry-
plied, but will reflect any prior carryovers which have been applied.
forward tax year. If the amount on line 4 is zero, enter the amount
See Computation of Any Remaining NOL Carryover After Applica-
entered on line 2. Otherwise enter the amount that line 2 exceeds
tion of an NOL below for the computation of any remaining NOL for
the amount on line 4.
carryover to a subsequent year.
Line 7. Enter the Alabama Taxable Income after application of
If the NOL being carried forward is less than taxable income
NOL which equals the amount that line 5 exceeds the amount en-
(computed without considering the NOL deduction to be applied);
tered on line 6.
taxable income will be reduced (but not below zero) by the amount
Part III – Computation of Tax
of the NOL carried forward.
Complete lines 8 through 11 below to determine the correct
Computation of Any Remaining NOL Carryover After Ap-
plication of an NOL. In order to determine the amount of an NOL
tax due after application of the NOL. Line 10 will only apply to
ESBT.
available for carryover, an adjustment must be made to the tax-
The amount from line 11 must be carried forward to page 1, line
able income for the year in which the deduction was taken. The
6a of the Form 41, or Schedule ESBT, line 21.
amount by which the NOL will be reduced is called “modified tax-