Contents

Reminders ................... 1

Introduction .................. 1

NOL Steps ................... 2

How To Figure an NOL ........... 2

Illustrated Form 1045, 

Schedule A .............. 3

When To Use an NOL ............ 3

Exceptions to 2-Year Carryback 

Rule .................. 3

Waiving the Carryback Period ..... 7

How To Carry an NOL Back or 

Forward ................ 7

How To Claim an NOL Deduction ..... 7

Deducting a Carryback ......... 8

Deducting a Carryforward ........ 8

Change in Marital Status ........ 8

Change in Filing Status ......... 9

Illustrated Form 1045 .......... 9

How To Figure an NOL Carryover .... 12

Illustrated Form 1045, 

Schedule B ............. 12

NOL Carryover From 2013 to 2014 ... 16

Worksheet Instructions ........ 16

How To Get Tax Help ........... 18

Index ..................... 20

Reminders

Future developments. For the latest developments related to Publication 536, such as legislation enacted after we release it, go to 

www.irs.gov/pub536.

Photographs of missing children. The Internal Revenue Service is a proud partner with the 

National Center for Missing and Exploited Children. Photographs of missing children selected 

by the Center may appear in this publication on 

pages that would otherwise be blank. You can 

help bring these children home by looking at the 

photographs and calling 1-800-THE-LOST 

(1-800-843-5678) if you recognize a child.

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 publication discusses NOLs for individuals, estates, 

and trusts. It covers:

How to figure an NOL,

When to use an NOL,

How to claim an NOL deduction, and

How to figure an NOL carryover.

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

2013 Returns

Get forms and other Information

faster and easier by

Internet at IRS.gov

Jan 23, 2014
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 income and business deductions to figure their individual NOLs.

Keeping records. You should keep records 

for any tax year that generates an NOL for 3 

years after you have used the carryback/carryforward or 3 years after the carryforward expires.

You should attach all required documents 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 publication.

Bankruptcies. See Publication 908, Bankruptcy Tax Guide.

NOLs of corporations. See Publication 

542, Corporations.

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 write to us at the following address:

Internal Revenue Service

Tax Forms and Publications Division

1111 Constitution Ave. NW, IR-6526

Washington, DC 20224

We respond to many letters by telephone. 

Therefore, it would be helpful if you would include your daytime phone number, including 

the area code, in your correspondence.

You can send your comments from 

www.irs.gov/formspubs/. Click on “More Information.” and then on “Comment on Tax Forms 

and Publications.”

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 

www.irs.gov/formspubs/ to download forms and 

publications, call 1-800-TAX-FORM 

(1-800-829-3676), or write to the address below 

and receive a response within 10 days after 

your request is received.

Internal Revenue Service

1201 N. Mitsubishi Motorway

Bloomington, IL 61705-6613

TIP

Tax questions. If you have a tax question, 

check the information available on IRS.gov or 

call 1-800-829-1040. We cannot answer tax 

questions sent to either of the above addresses.

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 figure appears on the line below:

Individuals — Form 1040, line 41, or Form 

1040NR, line 39.

Estates and trusts — Form 1041, line 22.

If the amount on that line is not negative, 

stop here — you do not have an NOL.

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 deduct when figuring an NOL. In general, the following items are not allowed when figuring an 

NOL.

Any deduction for personal exemptions.

 1040X

 1045

Capital losses in excess of capital gains.

The section 1202 exclusion of the gain 

from the sale or exchange of qualified 

small business stock.

Nonbusiness deductions in excess of nonbusiness income.

The net operating loss deduction.

The domestic production activities deduction.

Form 1045, Schedule A. Use Form 1045, 

Schedule A, to figure an NOL. The following 

discussion explains Schedule A and includes 

an illustrated example.

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. Examples 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 deduction,

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 following.

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 partnership 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 nonbusiness 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.

Page 2 Publication 536 (2013)
Unrecovered investment in a pension or 

annuity claimed on a decedent's final return.

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 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 receive from your trade or business or your employment. This includes salaries and wages, 

self-employment income, unemployment compensation included in your gross income, and 

your share of business income from partnerships and S corporations. Also, do not include 

rental income or ordinary gain from the sale or 

other disposition of business real estate or depreciable business property.

Adjustment for section 1202 exclusion 

(line 17). Enter on line 17 any gain you excluded under section 1202 on the sale or exchange 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 business capital losses or nonbusiness capital losses.

Nonbusiness capital losses. You can deduct your nonbusiness capital losses (line 2) 

only up to the amount of your nonbusiness capital gains without regard to any section 1202 exclusion (line 3). If your nonbusiness capital losses are more than your nonbusiness capital 

gains without regard to any section 1202 exclusion, 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 deductions (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 production 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.

Illustrated Form 1045, 

Schedule A

The following example illustrates how to figure 

an NOL. It includes filled-in pages 1 and 2 of 

Form 1040 and Form 1045, Schedule A.

Example. Glenn Johnson is in the retail record business. He is single and has the following income and deductions on his Form 1040 

for 2013. See the illustrated Form 1040, later.

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 ................. 6,100

Personal exemption ................ 3,900

Glenn's total deductions $16,000

Glenn's deductions exceed his income by 

$12,350 ($16,000 − $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. See the Illustrated Form 

1045, Schedule A, later.

The following items are not allowed on Form 

1045, Schedule A.

Nonbusiness net short-term capital loss .... $1,000

Nonbusiness deductions

(standard deduction, $6,100) minus

nonbusiness income (interest, $425) ....... 5,675

Deduction for personal exemption ........ 3,900

Total adjustments to net loss $10,575

Therefore, Glenn's NOL for 2013 is figured 

as follows:

Glenn's total 2013 income ............ $3,650

Less:

Glenn's original 2013 total 

deductions ............. $16,000

Reduced by the disallowed 

items ................

− 10,575 − 5,425

Glenn's NOL for 2013 ............... $1,775

When To Use an NOL

Generally, if you have an NOL for a tax year 

ending in 2013, 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 carryforward period.

NOL year. This is the year in which the NOL 

occurred.

Exceptions to 2-Year 

Carryback Rule

Eligible losses, farming losses, qualified disaster losses, and specified liability losses, all defined 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 eligible loss is any part of an NOL that:

Is from a casualty or theft, or

Is attributable to a federally declared disaster for a qualified small business or certain 

qualified farming businesses.

Qualified small business. A qualified 

small business is a sole proprietorship or a partnership that has average annual gross receipts 

(reduced by returns and allowances) of $5 million 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 attributable 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 contract 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 2013, 

attach to your 2013 income tax return filed by 

the due date (including extensions) a statement 

that you are choosing to treat any 2013 farming 

losses without regard to the special 5-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 extensions). Attach an election 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.

Publication 536 (2013) Page 3
Form

1040 Department of the Treasury—Internal Revenue Service 

OMB No. 1545-0074

(99)

U.S. Individual Income Tax Return 2013 IRS Use Only—Do not write or staple in this space. 

For the year Jan. 1–Dec. 31, 2013, or other tax year beginning , 2013, ending , 20 See separate instructions.

Your rst name and initial Last name Your social security number 

If a joint return, spouse’s rst name and initial Last name Spouse’s social security number 

▲ Make sure the SSN(s) above 

and on line 6c are correct.

Home address (number and street). If you have a P.O. box, see instructions. Apt. no. 

City, town or post ofce, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). 

Foreign country name Foreign province/state/county Foreign postal code 

Presidential Election Campaign

Check here if you, or your spouse if ling 

jointly, want $3 to go to this fund. Checking 

a box below will not change your tax or 

refund. You Spouse

Filing Status 

Check only one 

box. 

1 Single 

2 Married ling jointly (even if only one had income) 

3 Married ling separately. Enter spouse’s SSN above 

and full name here. ▶

4 Head of household (with qualifying person). (See instructions.) If 

the qualifying person is a child but not your dependent, enter this 

child’s name here. ▶

5 Qualifying widow(er) with dependent child 

Exemptions 6a Yourself. If someone can claim you as a dependent, do not check box 6a . . . . .

b Spouse . . . . . . . . . . . . . . . . . . . . . . . . } c Dependents: 

(1) First name Last name 

(2) Dependent’s

social security number 

(3) Dependent’s 

relationship to you 

(4) ✓ if child under age 17 

qualifying for child tax credit 

(see instructions) 

If more than four 

dependents, see 

instructions and 

check here ▶

d Total number of exemptions claimed . . . . . . . . . . . . . . . . .

Boxes checked 

on 6a and 6b

No. of children 

on 6c who: 

• lived with you 

• did not live with 

you due to divorce 

or separation (see instructions)

Dependents on 6c 

not entered above 

Add numbers on 

lines above ▶

Income 

Attach Form(s) 

W-2 here. Also 

attach Forms 

W-2G and 

1099-R if tax 

was withheld. 

If you did not 

get a W-2, 

see instructions. 

7 Wages, salaries, tips, etc. Attach Form(s) W-2 . . . . . . . . . . . . 7 

8a Taxable interest. Attach Schedule B if required . . . . . . . . . . . . 8a 

b Tax-exempt interest. Do not include on line 8a . . . 8b 

9 a Ordinary dividends. Attach Schedule B if required . . . . . . . . . . . 9a 

b Qualied dividends . . . . . . . . . . . 9b 

10 Taxable refunds, credits, or offsets of state and local income taxes . . . . . . 10 

11 Alimony received . . . . . . . . . . . . . . . . . . . . . 11 

12 Business income or (loss). Attach Schedule C or C-EZ . . . . . . . . . . 12 

13 Capital gain or (loss). Attach Schedule D if required. If not required, check here ▶ 13 

14 Other gains or (losses). Attach Form 4797 . . . . . . . . . . . . . . 14 

15 a IRA distributions . 15a b Taxable amount . . . 15b 

16 a Pensions and annuities 16a b Taxable amount . . . 16b 

17 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 17 

18 Farm income or (loss). Attach Schedule F . . . . . . . . . . . . . . 18 

19 Unemployment compensation . . . . . . . . . . . . . . . . . 19 

20 a Social security benets 20a b Taxable amount . . . 20b 

21 Other income. List type and amount 21 

22 Combine the amounts in the far right column for lines 7 through 21. This is your total income ▶ 22 

Adjusted 

Gross 

Income 

23 Educator expenses . . . . . . . . . . 23 

24 Certain business expenses of reservists, performing artists, and 

fee-basis government ofcials. Attach Form 2106 or 2106-EZ 24 

25 Health savings account deduction. Attach Form 8889 . 25 

26 Moving expenses. Attach Form 3903 . . . . . . 26 

27 Deductible part of self-employment tax. Attach Schedule SE . 27 

28 Self-employed SEP, SIMPLE, and qualied plans . . 28 

29 Self-employed health insurance deduction . . . . 29 

30 Penalty on early withdrawal of savings . . . . . . 30 

31 a Alimony paid b Recipient’s SSN ▶ 31a 

32 IRA deduction . . . . . . . . . . . . . 32 

33 Student loan interest deduction . . . . . . . . 33 

34 Tuition and fees. Attach Form 8917 . . . . . . . 34 

35 Domestic production activities deduction. Attach Form 8903 35 

36 Add lines 23 through 35 . . . . . . . . . . . . . . . . . . . 36 

37 Subtract line 36 from line 22. This is your adjusted gross income . . . . . ▶ 37 

For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 1040 (2013) 

Glenn M. Johnson 765 00 4321

5603 E. Main Street

Anytown, VA 20000

√

√

1

1

1,225

425

(5,000)

1,000 *

(2,350)

(2,350)

√

*Net capital gain ($2,000 less $1,000 loss)

Page 4 Publication 536 (2013)
Form 1040 (2013) Page 2 

Tax and 

Credits

38 Amount from line 37 (adjusted gross income) . . . . . . . . . . . . . . 38 

39a Check 

if: { You were born before January 2, 1949, Blind.

Spouse was born before January 2, 1949, Blind.} Total boxes checked ▶ 39a 

Standard b If your spouse itemizes on a separate return or you were a dual-status alien, check here ▶ 39b 

Deduction 

for— 

• People who 

check any 

box on line 

39a or 39b or who can be 

claimed as a 

dependent, 

see 

instructions. 

• All others: 

Single or 

Married ling 

separately, 

$6,100 

Married ling 

jointly or 

Qualifying 

widow(er), 

$12,200 

Head of 

household, 

$8,950 

40 Itemized deductions (from Schedule A) or your standard deduction (see left margin) . . 40

41 Subtract line 40 from line 38 . . . . . . . . . . . . . . . . . . . 41 

42 Exemptions. If line 38 is $150,000 or less, multiply $3,900 by the number on line 6d. Otherwise, see instructions 42 

43 Taxable income. Subtract line 42 from line 41. If line 42 is more than line 41, enter -0- . . 43 

44 Tax (see instructions). Check if any from: a Form(s) 8814 b Form 4972 c 44 

45 Alternative minimum tax (see instructions). Attach Form 6251 . . . . . . . . . 45 

46 Add lines 44 and 45 . . . . . . . . . . . . . . . . . . . . . ▶ 46 

47 Foreign tax credit. Attach Form 1116 if required . . . . 47 

48 Credit for child and dependent care expenses. Attach Form 2441 48 

49 Education credits from Form 8863, line 19 . . . . . 49 

50 Retirement savings contributions credit. Attach Form 8880 50 

51 Child tax credit. Attach Schedule 8812, if required . . . 51 

52 Residential energy credits. Attach Form 5695 . . . . 52 

53 Other credits from Form: a 3800 b 8801 c 53

54 Add lines 47 through 53. These are your total credits . . . . . . . . . . . . 54

55 Subtract line 54 from line 46. If line 54 is more than line 46, enter -0- . . . . . . ▶ 55

Other 

Taxes 

56 Self-employment tax. Attach Schedule SE . . . . . . . . . . . . . . . 56 

57 Unreported social security and Medicare tax from Form: a 4137 b 8919 . . 57 

58 Additional tax on IRAs, other qualied retirement plans, etc. Attach Form 5329 if required . . 58

59a 59a

b 59b

Household employment taxes from Schedule H . . . . . . . . . . . . . .

First-time homebuyer credit repayment. Attach Form 5405 if required . . . . . . . .

60 Taxes from: a Form 8959 b Form 8960 c Instructions; enter code(s) 60

61 Add lines 55 through 60. This is your total tax . . . . . . . . . . . . . ▶ 61

Payments 62 Federal income tax withheld from Forms W-2 and 1099 . . 62

63 2013 estimated tax payments and amount applied from 2012 return 63

If you have a 

qualifying 

child, attach 

Schedule EIC. 

64a Earned income credit (EIC) . . . . . . . . . . 64a 

b Nontaxable combat pay election 64b 

65 Additional child tax credit. Attach Schedule 8812 . . . . . 65

66 American opportunity credit from Form 8863, line 8 . . . . 66

67 Reserved . . . . . . . . . . . . . . . . 67

68 Amount paid with request for extension to le . . . . . 68

69 Excess social security and tier 1 RRTA tax withheld . . . . 69

70 Credit for federal tax on fuels. Attach Form 4136 . . . . 70

71 Credits from Form: a 2439 b Reserved c 8885 d 71

72 Add lines 62, 63, 64a, and 65 through 71. These are your total payments . . . . . ▶ 72

Refund 

Direct deposit? 

See 

instructions. 

73 If line 72 is more than line 61, subtract line 61 from line 72. This is the amount you overpaid 73

74a Amount of line 73 you want refunded to you. If Form 8888 is attached, check here . ▶ 74a 

▶ 

▶

b Routing number ▶ c Type: Checking Savings

d Account number

75 Amount of line 73 you want applied to your 2014 estimated tax ▶ 75

Amount 

You Owe 

76 Amount you owe. Subtract line 72 from line 61. For details on how to pay, see instructions ▶ 76

77 Estimated tax penalty (see instructions) . . . . . . . 77

Third Party 

Designee 

Do you want to allow another person to discuss this return with the IRS (see instructions)? Yes. Complete below. No

Designee’s 

name ▶

Phone 

no. ▶

Personal identication 

number (PIN) ▶

Sign 

Here 

Joint return? See 

instructions. 

Keep a copy for 

your records. 

Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, 

they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

Your signature Date Your occupation Daytime phone number

Spouse’s signature. If a joint return, both must sign. ▲Date Spouse’s occupation If the IRS sent you an Identity Protection 

PIN, enter it 

here (see inst.)

Paid 

Preparer 

Use Only 

Print/Type preparer’s name Preparer’s signature Date 

Check if 

self-employed

 PTIN

Firm’s name ▶

Firm’s address ▶

Firm's EIN ▶

Phone no. 

Form 1040 (2013) 

Glenn M. Johnson 2-15-14 Self-Employed

(8,450)

3,900

-0-

(2,350)

(6,100)

Publication 536 (2013) Page 5
Form 1045 (2013) Page 2 

Schedule A—NOL (see instructions)

1 Enter the amount from your 2013 Form 1040, line 41, or Form 1040NR, line 39. Estates and trusts, 

enter taxable income increased by the total of the charitable deduction, income distribution

deduction, and exemption amount . . . . . . . . . . . . . . . . . . . . . 1 

2 Nonbusiness capital losses before limitation. Enter as a positive number 2 

3 Nonbusiness capital gains (without regard to any section 1202 exclusion) 3 

4 If line 2 is more than line 3, enter the difference. Otherwise, enter -0- . . 4 

5 If line 3 is more than line 2, enter the difference. 

Otherwise, enter -0- . . . . . . . . . 5 

6 Nonbusiness deductions (see instructions) . . . . . . . . . . . 6 

7 Nonbusiness income other than capital gains (see 

instructions) . . . . . . . . . . . . 7 

8 Add lines 5 and 7 . . . . . . . . . . . . . . . . . . . 8 

9 If line 6 is more than line 8, enter the difference. Otherwise, enter -0- . . . . . . . . . . 9 

10 If line 8 is more than line 6, enter the difference. 

Otherwise, enter -0-. But do not enter more 

than line 5 . . . . . . . . . . . . 10 

11 Business capital losses before limitation. Enter as a positive number . . 11 

12 Business capital gains (without regard to any 

section 1202 exclusion) . . . . . . . . 12 

13 Add lines 10 and 12 . . . . . . . . . . . . . . . . . . 13 

14 Subtract line 13 from line 11. If zero or less, enter -0- . . . . . . . 14 

15 Add lines 4 and 14 . . . . . . . . . . . . . . . . . . . 15 

16 Enter the loss, if any, from line 16 of your 2013 Schedule D (Form 1040). 

(Estates and trusts, enter the loss, if any, from line 19, column (3), of

Schedule D (Form 1041).) Enter as a positive number. If you do not have a 

loss on that line (and do not have a section 1202 exclusion), skip lines 16 

through 21 and enter on line 22 the amount from line 15 . . . . . . 16 

17 Section 1202 exclusion. Enter as a positive number . . . . . . . . . . . . . . . . 17 

18 Subtract line 17 from line 16. If zero or less, enter -0- . . . . . . . 18 

19 Enter the loss, if any, from line 21 of your 2013 Schedule D (Form 1040). 

(Estates and trusts, enter the loss, if any, from line 20 of Schedule D (Form

1041).) Enter as a positive number . . . . . . . . . . . . . 19 

20 If line 18 is more than line 19, enter the difference. Otherwise, enter -0- . 20 

21 If line 19 is more than line 18, enter the difference. Otherwise, enter -0- . . . . . . . . . 21 

22 Subtract line 20 from line 15. If zero or less, enter -0- . . . . . . . . . . . . . . . 22 

23 Domestic production activities deduction from your 2013 Form 1040, line 35, or Form 1040NR, line 

34 (or included on Form 1041, line 15a) . . . . . . . . . . . . . . . . . . . . 23 

24 NOL deduction for losses from other years. Enter as a positive number . . . . . . . . . 24 

25 NOL. Combine lines 1, 9, 17, and 21 through 24. If the result is less than zero, enter it here and on 

page 1, line 1a. If the result is zero or more, you do not have an NOL . . . . . . . . . . 25

Form 1045 (2013)

(8,450)

(1,775)

1,000

1,000

1,000

1,000

2,000

2,000

-0-

-0-

-0-

-0-

-0-

425

425

6,100

5,675 

-0-

Page 6 Publication 536 (2013)
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 before January 1, 2010, in the disaster 

area, plus

b. Any allowable qualified disaster expenses (even if you did not choose to 

treat those expenses as deductions in 

the current year), or

2. The NOL for the tax year.

Qualified disaster expenses. A qualified 

disaster expense is any capital expense paid or 

incurred in connection with a trade or business 

or with business-related property which is:

For the abatement or control of hazardous 

substances that were released as a result 

of a federally declared disaster occurring 

before January 1, 2010,

For the removal of debris from, or the demolition of structures on, real property which 

is business-related property damaged or 

destroyed as a result of a federally declared disaster occurring before January 1, 

2010, or

For the repair of business-related property 

damaged as a result of a federally declared disaster occurring before January 1, 

2010.

Business-related property is property held for 

use in a trade or business, property held for the 

production of income, or inventory property.

Note. Section 198A allows taxpayers to 

treat certain capital expenses (qualified disaster 

expenses) as deductions in the year the expenses were paid or incurred.

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 include 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 footage) 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 liability loss is a loss arising from:

Product liability and expenses incurred in 

the investigation or settlement of, or opposition 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 contamination, or

4. Payment under any workers compensation 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 accrual method of accounting throughout the period 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 special 10-year carryback rule. To make this choice 

for 2013 attach to your 2013 income tax return 

filed by the due date (including extensions) a 

statement that you are choosing to treat any 

2013 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 extensions). Attach a 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.

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 (including extensions) for the NOL year. This statement 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 amended return, and write “Filed pursuant to section 

301.9100-2” at the top of the statement.

Once you choose to waive the carryback period, it generally is irrevocable. If you choose to 

waive the carryback period for more than one 

NOL, you must make a separate choice and attach 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 

CAUTION

!

carryback 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 2013 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 2011, the second year before 

the NOL year, as shown in the following chart.

Year

Carryback/

Carryover

Unused

Loss

2011 ............... $42,000 $40,000

2012 ............... 40,000 37,000

2013 (NOL year)

2014 ............... 37,000 31,500

2015 ............... 31,500 22,500

2016 ............... 22,500 12,700

2017 ............... 12,700 4,000

2018 ............... 4,000 -0-

If your loss were larger, you could carry it 

forward until the year 2033. If you still had an 

unused 2013 carryforward after the year 2033, 

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 attributable to a casualty loss and this loss qualifies for a 3-year carryback period. You begin 

using the $4,000 in 2010. As shown in the following chart, $3,000 of this NOL is used in 

2010. The remaining $1,000 is carried to 2011 

with the $38,000 NOL that you must begin using in 2011.

Year

Carryback/

Carryover

Unused

Loss

2010 ............... $4,000 $1,000

2011 ............... 39,000 37,000

2012 ............... 37,000 34,000

2013 (NOL year)

2014 ............... 34,000 28,500

2015 ............... 28,500 19,500

2016 ............... 19,500 9,700

2017 ............... 9,700 1,000

2018 ............... 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 

Publication 536 (2013) Page 7
minus 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 refund 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 apply 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 appropriate year's Form 1041, check the “Amended return” box, and follow the Form 1041 instructions 

for amended returns. Include the NOL deduction with other deductions not subject to the 2% 

limit (line 15a). Also, see the special procedures 

for filing an amended return due to an NOL carryback, explained under Form 1040X, later.

Form 1045. You can apply for a quick refund 

by filing Form 1045. This form results in a tentative adjustment of tax in the carryback year. 

See the Illustrated Form 1045. at the end of this 

discussion.

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 after 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 

2013 to 2011, you must file Form 1045 on or after the date you file your tax return for 2013, but 

no later than December 31, 2014.

Form 1040X. If you do not file Form 1045, you 

can file Form 1040X to get a refund of tax because of an NOL carryback. File Form 1040X 

within 3 years after the due date, including extensions, for filing the return for the NOL year. 

For example, if you are a calendar year taxpayer and filed your 2011 return by the April 15, 

2012, due date, you must file a claim for refund 

of 2008 tax because of an NOL carryback from 

2011 by April 15, 2015.

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 carryback” column for the applicable carryback 

year.) Use your adjusted gross income after applying 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, refigure 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, enter your adjusted gross income refigured after 

applying the NOL deduction and after refiguring 

any above items.)

Next, refigure your taxable income. (On 

Form 1045, use lines 12 through 15 and the “After carryback” column.) Use your refigured adjusted 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 expenses.

The itemized deduction for qualified mortgage insurance premiums.

The itemized deduction for casualty losses.

Miscellaneous itemized deductions subject 

to the 2% limit.

The overall limit on itemized deductions 

(do not apply to carryback years beginning 

after December 31, 2009).

The phaseout of the deduction for exemptions (do not apply to carryback years beginning after December 31, 2009).

Qualified motor vehicle tax (do not apply to 

carryback years beginning after December 

31, 2009).

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. Refigure 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 25, and 

the “After carryback” column.) The earned income credit, for example, may be affected by 

changes to adjusted gross income or the 

CAUTION

!

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.

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 2013). 

Estates and trusts include an NOL deduction on 

Form 1041 with other deductions not subject to 

the 2% limit (line 15a for 2013).

You must attach a statement that shows all 

the important facts about the NOL. Your statement should include a computation showing 

how you figured the NOL deduction. If you deduct 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 

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 limited 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 refigured 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 refund.

Figuring your share of a joint tax liability. 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 had also 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 return by the amount figured in (4). This is 

your share of the joint tax liability.

Page 8 Publication 536 (2013)
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 original 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 liability. Use your taxable income as originally reported on the joint return in steps (1) and (2) 

above, and substitute the joint payment or refund 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.

Special rules apply for figuring the NOL carrybacks and carryovers of married people 

whose filing status changes for any tax year involved in figuring an NOL carryback or carryover.

Separate to joint return. If you and your 

spouse file a joint return for a carryback or carryforward year, and were married but filed separate 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 following 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 2013. They have an 

NOL of $5,000. They carry the NOL back to 

2011, a year in which Mark and Nancy filed 

separate returns. Figured separately, Nancy's 

2013 deductions were more than her income, 

and Mark's income was more than his deductions. Mark does not have any NOL to carry 

back. Nancy can carry back the entire $5,000 

NOL to her 2011 separate return.

Example 2. Assume the same facts as in 

Example 1, except that both Mark and Nancy 

had deductions in 2013 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 included 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 return, all of the joint carryover is that spouse's 

carryover. If both spouses had an NOL deduction (including separate carryovers of a joint 

NOL, figured as explained in the previous discussion), figure each spouse's share of the joint 

carryover through the following steps.

1. Figure each spouse's modified taxable income as if he or she filed a separate return. 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 taxable 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 return for 2011 and separate returns for 2012 and 

2013. In 2013, 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 

2011 joint return and claim a $20,000 NOL deduction.

Their joint modified taxable income (MTI) for 

2011 is $15,000, and their joint NOL carryover 

to 2012 is $5,000 ($20,000 – $15,000). Sam 

and Wanda each figure their separate MTI for 

2011 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 2012 ............ $5,000

Joint carryover to 2012 ............. $5,000

Sam's carryover ................. − 5,000

Wanda's carryover to 2012 .......... $-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 2012. 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 2012 

is $5,000.

Illustrated Form 1045

The following example illustrates how to use 

Form 1045 to claim an NOL deduction in a carryback year. It includes a filled-in page 1 of 

Form 1045.

Example. Martha Sanders is a self-employed contractor. Martha's 2013 deductions 

are more than her 2013 income because of a 

business loss. She uses Form 1045 to carry 

back her NOL 2 years and claim an NOL deduction in 2011. Her filing status in both years 

was single. See the filled-in Form 1045 later.

Martha figures her 2013 NOL on Form 1045, 

Schedule A (not shown). (For an example using 

Form 1045, Schedule A, see Illustrated Form 

1045, Schedule A under How To Figure an 

NOL, earlier.) She enters the $10,000 NOL from 

Form 1045, Schedule A, line 25, on Form 1045, 

line 1a.

Martha completes lines 10 through 25, using 

the “Before carryback” column under the column for the second preceding tax year ended 

12/31/11 on page 1 of Form 1045 using the following amounts from her 2011 return.

Publication 536 (2013) Page 9
2011 Adjusted gross income ........ $50,000

Itemized deductions:

Medical expenses

[$6,000 − ($50,000 

× 7.5%)] .......... $2,250

State income tax .... + 2,000

Real estate tax ...... + 4,000

Home mortgage 

interest ...........

+ 5,000

Total itemized deductions ........ $13,250

Exemption ..................... $3,700

Income tax ..................... $4,550

Self-employment tax .............. $6,120

Martha refigures her taxable income for 

2011 after carrying back her 2013 NOL as follows:

2011 Adjusted gross income ........ $50,000

Less:

NOL from 2013 ................. −10,000

2011 Adjusted gross income after 

carryback ..................... $40,000

Less:

Itemized deductions:

Medical expenses

[$6,000 − ($40,000 

× 7.5%)] .......... $3,000

State income tax .... + 2,000

Real estate tax ..... + 4,000

Home mortgage 

interest ...........

+ 5,000

Total itemized deductions ........ −14,000

Less:

Exemption ..................... − 3,700

2011 Taxable income after 

carryback .....................

$22,300

Martha then completes lines 10 through 25, 

using the “After carryback” column under the 

column for the second preceding tax year 

ended 12/31/11. On line 10, Martha enters her 

$10,000 NOL deduction. Her new adjusted 

gross income on line 11 is $40,000 ($50,000 − 

$10,000). To complete line 12, she must refigure her medical expense deduction using her 

new adjusted gross income. Her refigured medical expense deduction is $3,000 [$6,000 − 

($40,000 × 7.5%)]. This increases her total 

itemized deductions to $14,000 [$13,250 + 

($3,000 − $2,250)].

Martha uses her refigured taxable income 

($22,300) from line 15, and the tax tables in her 

2011 Form 1040 instructions to find her income 

tax. She enters the new amount, $2,924, on 

line 16, and her new total tax liability, $9,044, on 

line 25.

Martha used up her $10,000 NOL in 2011 

so she does not complete a column for the first 

preceding tax year ended 12/31/2012. The decrease in tax because of her NOL deduction 

(line 27) is $1,612.

Martha files Form 1045 after filing her 2013 

return, but no later than December 31, 2014. 

She mails it to the Internal Revenue Service 

Center for the place where she lives as shown 

in the 2013 instructions for Form 1040 and attaches a copy of her 2013 return (including the 

applicable forms and schedules).

Page 10 Publication 536 (2013)
Form 1045

Department of the Treasury 

Internal Revenue Service 

Application for Tentative Refund

▶ Separate instructions and additional information are available at IRS.gov/form1045. 

▶ Do not attach to your income tax return. Mail in a separate envelope. 

▶ For use by individuals, estates, or trusts.

OMB No. 1545-0098

2013

Type or print

Name(s) shown on return Social security or employer identification number

Number, street, and apt. or suite no. if a P.O. box, see instructions. Spouse’s social security number (SSN)

City, town or post ofce, state, and Zip code. If a foreign address, also complete spaces below (see instructions). Daytime phone number

Foreign country name Foreign province/county Foreign postal code

1 This application is led 

to carry back: a Net operating loss (NOL) (Sch. A, line 25, page 2)

$ 

b Unused general business credit

$ 

c Net section 1256 contracts loss

$ 

2 a For the calendar year 2013, or other tax year

beginning , 2013, and ending , 20

b Date tax return was led

3 If this application is for an unused credit created by another carryback, enter year of rst carryback ▶

4 If you led a joint return (or separate return) for some, but not all, of the tax years involved in guring the carryback, list the 

years and specify whether joint (J) or separate (S) return for each ▶

5 If SSN for carryback year is different from above, enter a SSN ▶ and b Year(s) ▶

6 If you changed your accounting period, give date permission to change was granted ▶

7 Have you led a petition in Tax Court for the year(s) to which the carryback is to be applied? . . . . . Yes No

8 Is any part of the decrease in tax due to a loss or credit resulting from a reportable transaction required to be

disclosed on Form 8886, Reportable Transaction Disclosure Statement? . . . . . . . . . . . . Yes No

9 If you are carrying back an NOL or net section 1256 contracts loss, did this cause the release of foreign tax 

credits or the release of other credits due to the release of the foreign tax credit (see instructions)? . . . Yes No

Computation of Decrease in Tax 

(see instructions)

preceding

tax year ended ▶

preceding

tax year ended ▶

preceding

tax year ended ▶

Note: If 1a and 1c are blank, skip lines 10 through 15. Before 

carryback

After 

carryback

Before 

carryback

After 

carryback

Before 

carryback

After 

carryback

10 NOL deduction after carryback (see instructions) 

11 Adjusted gross income . . . . .

12 Deductions (see instructions) . . .

13 Subtract line 12 from line 11 . . .

14 Exemptions (see instructions) . . .

15 Taxable income. Line 13 minus line 14

16 Income tax. See instructions and 

attach an explanation . . . . . .

17 Alternative minimum tax . . . . .

18 Add lines 16 and 17 . . . . . .

19 General business credit (see instructions) 

20 Other credits. Identify . . . . . .

21 Total credits. Add lines 19 and 20 . .

22 Subtract line 21 from line 18 . . .

23 Self-employment tax . . . . . .

24 Other taxes . . . . . . . . .

25 Total tax. Add lines 22 through 24 . .

26 Enter the amount from the “After 

carryback” column on line 25 for each year

27 Decrease in tax. Line 25 minus line 26

28 Overpayment of tax due to a claim of right adjustment under section 1341(b)(1) (attach computation) . . .

Sign 

Here 

Keep a copy of 

this application 

for your records.

Under penalties of perjury, I declare that I have examined this application and accompanying schedules and statements, and to the best of my knowledge 

and belief, they are true, correct, and complete.

▲

Your signature Date

▲

Spouse’s signature. If Form 1045 is led jointly, both must sign. Date

Paid 

Preparer 

Use Only

Print/Type preparer’s name Preparer’s signature Date Check if 

self-employed

PTIN

Firm’s name ▶ Firm's EIN ▶

Firm’s address ▶ Phone no.

For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see instructions. Cat. No. 10670A Form 1045 (2013)

03-05-2014

04-12-2014

Martha Sanders 123-00-4567

9876 Holly Street

Yardley, PA 19067 041-123-4567

10,000

√

2nd 1st

12-31-11 12-31-12

50,000

10,000

40,000

14,000

26,000

22,300

10,656

36,750

33,050

3,700 3,700

4,536

4,536

4,536

6,120 6,120

2,924

2,924

2,924

9,044 

9,044

1,612

Martha Sanders

13,250

√

√

Publication 536 (2013) Page 11
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 carryover. 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 carryback or carryforward year. If your NOL deduction 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 taxable 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 income 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 exemptions for yourself, your spouse, or dependents.

5. You must figure any item affected by the 

amount of your adjusted gross income after 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 deduction items used to figure adjusted 

gross income (for example, IRA deductions), as well as certain itemized deductions. To figure a charitable contribution 

deduction, do not include deductions for 

NOL carrybacks in the change in (1) but 

do include deductions for NOL carryforwards 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 taxable income for carryback years and your carryover from each of those years. Do not use Form 

1045, Schedule B, for a carryforward year. If 

your 2013 return includes an NOL deduction 

from an NOL year before 2013 that reduced 

your taxable income to zero (to less than zero, if 

an estate or trust), see NOL Carryover From 

2013 to 2014, later.

Illustrated Form 1045, 

Schedule B

The following example illustrates how to figure 

an NOL carryover from a carryback year. It 

includes a filled-in Form 1045, Schedule B.

Example. Ida Brown runs a small clothing 

shop. In 2013, she has an NOL of $36,000 that 

she carries back to 2011. She has no other carrybacks or carryforwards to 2011.

Ida's adjusted gross income in 2011 was 

$35,000, consisting of her salary of $36,000 minus a $1,000 capital loss deduction. She is single and claimed only one personal exemption of 

$3,700. During that year, she gave $1,450 in 

charitable contributions. Her medical expenses 

were $3,000. She also deducted $1,650 in 

taxes and $3,125 in home mortgage interest.

Her deduction for charitable contributions 

was not limited because her contributions, 

$1,450, were less than 50% of her adjusted 

gross income. The deduction for medical expenses was limited to expenses over 7.5% of 

adjusted gross income (.075 × $35,000 = 

$2,625; $3,000 − $2,625 = $375). The deductions for taxes and home mortgage interest 

were not subject to any limits. She was able to 

claim $6,600 ($1,450 + $375 + $1,650 + 

$3,125) in itemized deductions and a personal 

exemption deduction of $3,700 for 2011. She 

had no other deductions in 2011 (except the 

NOL deduction). Her taxable income (figured 

without the NOL deduction) for the year was 

$24,700.

Ida's adjusted gross income in 2012 was 

$9,325, consisting of net business income from 

the clothing shop of $12,325 and a net capital 

loss of $3,000. She did not itemize her deductions in 2012. She deducted the standard deduction of $5,950 and the personal exemption 

deduction of $3,800. She had no other deductions in 2012 (other than the NOL deduction). 

Her taxable income, therefore, was ($425).

Ida's $36,000 carryback will result in her 

having 2011 taxable income of zero. She then 

completes the column for the second preceding 

tax year ended 12/31/11 on Form 1045, Schedule B, to figure how much of her NOL she uses 

up in 2011 and how much she can carry over to 

2012. She completes the column for the first 

preceding tax year ended 12/31/12. See the illustrated Form 1045, Schedule B, shown later.

Column 1, line 1. Ida enters $36,000, her 

2013 net operating loss, on line 1.

Column 1, line 2. She enters $24,700, her 

2011 taxable income (figured without the NOL 

deduction), on line 2.

Column 1, line 3. Ida enters her net capital 

loss deduction of $1,000 on line 3.

Column 1, lines 4 and 5. Ida had no section 1202 exclusion or domestic production activities deduction in 2011. She enters zero on 

lines 4 and 5.

Column 1, line 6. Although Ida's entry on 

line 3 modifies her adjusted gross income, that 

does not affect any other items included in her 

adjusted gross income. Ida enters zero on 

line 6.

Column 1, line 7. Ida had itemized deductions and entered $1,000 on line 3, so she completes lines 11 through 38 to figure her adjustment to itemized deductions. On line 7, she 

enters the total adjustment from line 38.

Column 1, line 8. Ida enters the deduction 

for her personal exemption of $3,700 for 2011.

Column 1, line 9. After combining lines 2 

through 8, Ida's modified taxable income is 

$29,475.

Column 1, line 10. Ida figures her carryover 

to 2012 by subtracting her modified taxable income (line 9) from her NOL deduction (line 1). 

She enters the $6,525 carryover on line 10. She 

also enters the $6,525 as her NOL deduction 

for 2012 on Form 1045, page 1, line 10, in the 

“After carryback” column under the column for 

the first preceding tax year ended 12/31/12. 

(For an illustrated example of page 1 of Form 

1045, see Illustrated Form 1045 under How To 

Claim an NOL Deduction, earlier.)

Next, Ida completes column 2 for the first 

preceding tax year ended 12/31/12.

Column 1, line 11. Ida's adjusted gross income for 2011 was $35,000.

Column 1, line 12. She adds lines 3 

through 6 and enters $1,000 on line 12. (This is 

her net capital loss deduction added back, 

which modifies her adjusted gross income.)

Column 1, line 13. Her modified adjusted 

gross income for 2011 is now $36,000.

Column 1, line 14. On her 2011 tax return, 

she deducted $375 as medical expenses.

Column 1, line 15. Her actual medical expenses were $3,000.

Column 1, line 16. She multiplies her modified adjusted gross income, $36,000, by .075. 

She enters $2,700 on line 16.

Column 1, line 17. She substracts $2,700 

from her actual medical expenses, $3,000. She 

enters $300 on line 17. This is her modified 

medical deduction.

Column 1, line 18. The difference between 

her medical deduction and her modified medical deduction is $75. She enters this on line 18.

Column 1, lines 19 through 21. Ida had 

no deduction for qualified mortgage insurance 

premiums in 2011. She skips lines 19 and 20 

and enters zero on line 21.

Column 1, line 22. She enters her modified 

adjusted gross income of $36,000 on line 22.

Column 1, line 23. She had no other carrybacks to 2011 and enters zero on line 23.

Column 1, line 24. Her modified adjusted 

gross income remains $36,000.

Column 1, line 25. Her actual contributions 

for 2011 were $1,450, which she enters on 

line 25.

Column 1, line 26. She now refigures her 

charitable contributions based on her modified 

adjusted gross income. Her contributions are 

well below the 50% limit, so she enters $1,450 

on line 26.

Column 1, line 27. The difference is zero.

Column 1, lines 28 through 37. Ida had 

no casualty losses or deductions for miscellaneous items in 2011. She skips lines 28 through 

31 and lines 33 through 36. Ida enters zero on 

lines 32 and 37.

Column 1, line 38. She combines lines 18, 

21, 27, 32, and 37 and enters $75 on line 38. 

She carries this figure to line 7.

Column 2, line 1. Ida enters $6,525, the 

carryback of her 2013 NOL to 2012, from column 1, line 10, on line 1.

Column 2, line 2. She enters ($425), her 

2012 taxable income, on line 2.

Column 2, line 3. Ida enters her net capital 

loss deduction of $3,000 on line 3.

Column 2, lines 4 and 5. Ida had no section 1202 exclusion or domestic production activities deduction in 2012. She enters zero on 

lines 4 and 5.

Page 12 Publication 536 (2013)
Column 2, line 6. Although Ida's entry on 

line 3 modifies her adjusted gross income, that 

does not affect any other items included in her 

adjusted gross income. Ida enters zero on 

line 6.

Column 2, line 7. Because Ida did not itemize deductions on her 2012 tax return, she enters zero on line 7.

Column 2, line 8. Ida enters the deduction 

for her personal exemption of $3,800 for 2012.

Column 2, line 9. After combining lines 2 

through 8, Ida's modified taxable income is 

$6,375.

Column 2, line 10. Ida figures her carryforward to 2014 by subtracting her modified taxable income (line 9) from her NOL deduction 

(line 1). She enters the $150 carryover on 

line 10.

Publication 536 (2013) Page 13
Form 1045 (2013) Page 3 

Schedule B—NOL Carryover (see instructions)

Complete one column before going to the 

next column. Start with the earliest 

carryback year.

preceding

tax year ended ▶

preceding

tax year ended ▶

preceding

 tax year ended ▶

1 NOL deduction (see instructions). 

Enter as a positive number . . . .

2 Taxable income before 2013 NOL 

carryback (see instructions). Estates 

and trusts, increase this amount by the 

sum of the charitable deduction and 

income distribution deduction . . .

3 Net capital loss deduction (see 

instructions) . . . . . . . . .

4 Section 1202 exclusion. Enter as a 

positive number . . . . . . . .

5 Domestic production activities 

deduction . . . . . . . . .

6 Adjustment to adjusted gross income 

(see instructions) . . . . . . .

7 Adjustment to itemized deductions (see 

instructions) . . . . . . . . .

8 Individuals, enter deduction for 

exemptions (minus any amount on 

Form 8914, line 6, for 2006 and 

2009; line 2 for 2005 and 2008). Estates 

and trusts, enter exemption amount .

9 Modied taxable income. Combine 

lines 2 through 8. If zero or less, enter 

-0- . . . . . . . . . . . .

10 NOL carryover (see instructions) . .

Adjustment to Itemized Deductions 

(Individuals Only) Complete lines 11 

through 38 for the carryback year(s) for 

which you itemized deductions only if 

line 3, 4, or 5 above is more than zero.

11 Adjusted gross income before 2013 

NOL carryback . . . . . . . .

12 Add lines 3 through 6 above . . .

 13 Modied adjusted gross income. Add 

lines 11 and 12 . . . . . . . .

14 Medical expenses from Sch. A (Form 

1040), line 4 (or as previously adjusted)

15 Medical expenses from Sch. A (Form 

1040), line 1 (or as previously adjusted)

16 Multiply line 13 by 7.5% (.075) . . .

 17 Subtract line 16 from line 15. If zero or 

less, enter -0- . . . . . . . .

18 Subtract line 17 from line 14 . . . .

19 Mortgage insurance premiums from 

Sch. A (Form 1040), line 13 (or as 

previously adjusted) . . . . . .

20 Regured mortgage insurance 

premiums (see instructions) . . . .

21 Subtract line 20 from line 19 . . .

Form 1045 (2013)

2nd 1st

12-31-11 12-31-12

36,000

36,000

24,700

35,000

1,000

1,000

3,000

3,000

2,700

6,525

-0-

-0-

-0- -0-

-0-

-0-

-0-

-0-

75

75

(425)

3,700 3,800

29,475

6,525

6,375

375

300

150

Page 14 Publication 536 (2013)
Form 1045 (2013) Page 4 

Schedule B—NOL Carryover (Continued)

Complete one column before going to the 

next column. Start with the earliest 

carryback year.

preceding

tax year ended ▶

preceding

tax year ended ▶

preceding

 tax year ended ▶

22 Modied adjusted gross income from 

line 13 on page 3 of the form . . .

23 Enter as a positive number any NOL 

carryback from a year before 2013 that 

was deducted to gure line 11 on page 

3 of the form . . . . . . . . .

24 Add lines 22 and 23 . . . . . .

25 Charitable contributions from Sch. A (Form 

1040), line 19 (line 18 for 2003 through 2006), 

or Sch. A (Form 1040NR), line 5 (line 7 for 

2003 through 2010), or as previously adjusted 

26 Regured charitable contributions (see 

instructions) . . . . . . . . .

27 Subtract line 26 from line 25 . . .

28 Casualty and theft losses from Form 

4684, line 18 (line 23 for 2008; line 21 

for 2009; line 20 for 2005, 2006, and 

2010) . . . . . . . . . . .

29 Casualty and theft losses from Form 

4684, line 16 (line 21 for 2008; line 18 for 

2005, 2006, and 2010; line 19 for 2009) 

30 Multiply line 22 by 10% (.10) . . .

 31 Subtract line 30 from line 29. If zero or 

less, enter -0- . . . . . . . .

32 Subtract line 31 from line 28 . . .

33 Miscellaneous itemized deductions from Sch. A 

(Form 1040), line 27 (line 26 for 2003 through 

2006), or Sch. A (Form 1040NR), line 13 (line 15 

for 2003 through 2010), or as previously adjusted 

34 Miscellaneous itemized deductions from Sch. A 

(Form 1040), line 24 (line 23 for 2003 through 

2006), or Sch. A (Form 1040NR), line 10 (line 12 

for 2003 through 2010), or as previously adjusted

35 Multiply line 22 by 2% (.02) . . . .

 36 Subtract line 35 from line 34. If zero or 

less, enter -0- . . . . . . . .

37 Subtract line 36 from line 33 . . .

38 Complete the worksheet in the 

instructions if line 22 is more than the 

applicable amount shown below (more 

than one-half that amount if married 

ling separately for that year). 

• $139,500 for 2003.

• $142,700 for 2004.

• $145,950 for 2005.

• $150,500 for 2006.

• $156,400 for 2007.

• $159,950 for 2008.

• $166,800 for 2009.

Otherwise, combine lines 18, 21, 27, 

32, and 37; enter the result here and 

on line 7 (page 3) . . . . . . .

Form 1045 (2013)

2nd

12-31-11

36,000

36,000

-0-

-0-

1,450

1,450

75

-0-

-0-

Publication 536 (2013) Page 15
NOL Carryover From 

2013 to 2014

If you had an NOL deduction carried forward 

from a year prior to 2013 that resulted in your 

having taxable income on your 2013 return of 

zero (of less than zero, if an estate or trust), 

complete Table 1, Worksheet for NOL Carryover From 2013 to 2014, on the following pages. It will help you figure your NOL to carry to 

2014. 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 2013 NOL deduction 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 taxable income below zero. Your NOL carryover to 

2014 is the total of the amount on line 10 of the 

worksheet and all later NOL amounts.

Example. Your taxable income for 2013 is 

$5,000 without your $9,000 NOL deduction. 

Your NOL deduction includes a $2,000 carryover from 2011 and a $7,000 carryover from 

2012. Subtract your 2011 NOL of $2,000 from 

$5,000. This gives you taxable income of 

$3,000. Your 2011 NOL is now completely used 

up. Subtract your $7,000 2012 NOL from 

$3,000. This gives you taxable income of 

($4,000). You now complete the worksheet for 

your 2012 NOL. Your NOL carryover to 2014 is 

the unused part of your 2012 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 income.

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 order 

listed above. Your adjustment for each item is 

the difference between the refigured amount 

and the amount included on your return. Combine the adjustments for previous items with 

your adjusted gross income before refiguring 

the next item. Keep a record of your computations.

Enter your total adjustments for the above 

items on line 6.

Line 7. Enter zero if you claimed the standard 

deduction or 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 apply 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 refigure miscellaneous itemized deductions of an 

estate or trust (Form 1041, line 15c), modified 

adjusted gross income is the total of the following 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 entered at the top of the worksheet and for 

later years.

To refigure the casualty and theft loss deduction 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 entered 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 income 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 2013 Instructions for Form 1045. On line 2 of the Mortgage Insurance Premiums Deduction Worksheet, 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 2012 to 2013 and your NOL deduction includes an amount from an NOL year before 

2012, you may have to reduce your contributions carryover. Reduce the contributions carryover by the amount of any adjustment you 

made to your 2012 charitable contributions deduction when figuring your NOL carryover to 

2013. Use the reduced contributions carryover 

to figure the amount to enter on line 23.

Page 16 Publication 536 (2013)
3.

4.

7.

8.

9.

11.

12.

5.

13.

15.

14.

16.

17.

18.

22.

23.

24.

25.

26.

27.

28.

29.

30.

31.

32.

6.

10.

19.

20.

21.

Table 1. Worksheet for NOL Carryover From 2013 to 2014 (For an NOL Year Before 2013)*

For Use by Individuals, Estates, and Trusts (Keep for your records.) 

See the instructions under NOL Carryover From 2013 to 2014.

NOL YEAR:

USE YOUR 2013 FORM 1040, FORM 1040NR (OR FORM 1041) TO COMPLETE THIS WORKSHEET:

1.

2.

Enter as a positive number your NOL deduction for the NOL year entered above from line 21 (Form 

1040 or Form 1040NR) or line 15a (Form 1041)

Enter your taxable income without the NOL deduction for 2013 (see instructions)

Enter as a positive number any net capital loss deduction

Enter as a positive number any gain excluded on the sale or exchange of qualied small business 

Enter the amount of any domestic production activities deduction

Enter any adjustments to your adjusted gross income (see instructions)

Enter any adjustments to your itemized deductions from line 33 below (see instructions)

Enter your deduction for exemptions from line 42 (Form 1040), line 40 (Form 1040NR), or line 20 

(Form 1041)

Modified taxable income. Combine lines 2 through 8. Enter the result (but not less than zero)

NOL carryover to 2014. Subtract line 9 from line 1. Enter the result (but not less than zero) here and 

on the “other income” line of Form 1040 or Form 1040NR (or the line on Form 1041 for deductions 

NOT subject to the 2% oor) in 2014

ADJUSTMENTS TO ITEMIZED DEDUCTIONS (INDIVIDUALS ONLY):

Enter your adjusted gross income without the NOL deduction for the NOL year entered above or later 

years. (see instructions)

Combine lines 3, 4, 5, and 6 above

Modified adjusted gross income. Combine lines 11 and 12 above

ADJUSTMENT TO MEDICAL EXPENSES:

Enter your medical expenses from Schedule A (Form 1040), line 4

Enter your medical expenses from Schedule A (Form 1040), line 1

Multiply line 13 above by 10% (.10). But if either you or your spouse was born before January 2, 

1949, multiply line 13 by 7.5% (.075) 

Subtract line 16 from line 15. Enter the result (but not less than zero)

Subtract line 17 from line 14

ADJUSTMENT TO MORTGAGE INSURANCE PREMIUMS:

*Note: If you choose to waive the carryback period, and instead you choose to only carry your 2013 NOL forward, use Schedule A, Form 1045, 

to compute your 2013 NOL that will be carried over to 2014. Report your 2013 NOL from line 25, Schedule A, Form 1045, on the “other 

income” line of your 2014 Form 1040 or Form 1040NR, or the line on Form 1041 for deductions NOT subject to the 2% floor in 2014.

Enter your mortgage insurance premiums deduction from Schedule A (Form 1040), line 13

Regure your mortgage insurance premiums deduction using line 13 above as your adjusted gross 

income (see instructions)

Subtract line 20 from line 19

ADJUSTMENT TO CHARITABLE CONTRIBUTIONS:

Enter your charitable contributions deduction from Schedule A (Form 1040), line 19, or Schedule A 

(Form 1040NR), line 5

Regure your charitable contributions deduction using line 13 above as your adjusted gross income 

(see instructions)

Subtract line 23 from line 22

ADJUSTMENT TO CASUALTY AND THEFT LOSSES:

Enter your casualty and theft losses from Form 4684, line 18

Multiply line 13 above by 10% (.10)

Subtract line 26 from line 25. Enter the result (but not less than zero)

ADJUSTMENT TO MISCELLANEOUS DEDUCTIONS:

Enter your miscellaneous deductions from Schedule A (Form 1040), line 27, or Schedule A (Form 1040NR), line 13

Enter your miscellaneous deductions from Schedule A (Form 1040), line 24, or Schedule A (Form 1040NR), line 10

Multiply line 13 above by 2% (.02)

Subtract line 31 from line 28

Subtract line 30 from line 29. Enter the result (but not less than zero)

Publication 536 (2013) Page 17
How To Get Tax Help

Whether it's help with a tax issue, preparing 

your tax return or a need for a free publication 

or form, get the help you need the way you want 

it: online, use a smart phone, call or walk in to 

an IRS office or volunteer site near you.

Free help with your tax return. You can get 

free help preparing your return nationwide from 

IRS-certified volunteers. The Volunteer Income 

Tax Assistance (VITA) program helps 

low-to-moderate income, elderly, people with 

disabilities, and limited English proficient taxpayers. The Tax Counseling for the Elderly 

(TCE) program helps taxpayers age 60 and 

older with their tax returns. Most VITA and TCE 

sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. In addition, 

some VITA and TCE sites provide taxpayers 

the opportunity to prepare their own return with 

help from an IRS-certified volunteer. To find the 

nearest VITA or TCE site, you can use the VITA 

Locator Tool on IRS.gov, download the IRS2Go 

app, or call 1-800-906-9887.

As part of the TCE program, AARP offers 

the Tax-Aide counseling program. To find the 

nearest AARP Tax-Aide site, visit AARP's website at www.aarp.org/money/taxaide or call 

1-888-227-7669. For more information on these 

programs, go to IRS.gov and enter “VITA” in the 

search box.

Internet. IRS.gov and IRS2Go are ready 

when you are —24 hours a day, 7 days a week.

Download the free IRS2Go app from the 

iTunes app store or from Google Play. Use 

it to check your refund status, order transcripts of your tax returns or tax account, 

watch the IRS YouTube channel, get IRS 

news as soon as it's released to the public, 

subscribe to filing season updates or daily 

tax tips, and follow the IRS Twitter news 

feed, @IRSnews, to get the latest federal 

tax news, including information about tax 

law changes and important IRS programs.

Check the status of your 2013 refund with 

the Where's My Refund? application on 

IRS.gov or download the IRS2Go app and 

select the Refund Status option. The IRS 

issues more than 9 out of 10 refunds in 

less than 21 days. Using these applications, you can start checking on the status 

of your return within 24 hours after we receive your e-filed return or 4 weeks after 

you mail a paper return. You will also be 

given a personalized refund date as soon 

as the IRS processes your tax return and 

approves your refund. The IRS updates 

Where's My Refund? every 24 hours, usually overnight, so you only need to check 

once a day.

Use the Interactive Tax Assistant (ITA) to 

research your tax questions. No need to 

wait on the phone or stand in line. The ITA 

is available 24 hours a day, 7 days a week, 

and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. When you 

reach the response screen, you can print 

the entire interview and the final response 

for your records. New subject areas are 

added on a regular basis.

Answers not provided through ITA may be 

found in Tax Trails, one of the Tax Topics 

on IRS.gov which contain general individual and business tax information or by 

searching the IRS Tax Map, which includes an international subject index. 

You can use the IRS Tax Map to search 

publications and instructions by topic or 

keyword. The IRS Tax Map integrates 

forms and publications into one research 

tool and provides single-point access to 

tax law information by subject. When the 

user searches the IRS Tax Map, they will 

be provided with links to related content in 

existing IRS publications, forms and instructions, questions and answers, and 

Tax Topics.

Coming this filing season, you can immediately view and print for free all 5 types of 

individual federal tax transcripts (tax returns, tax account, record of account, 

wage and income statement, and certification of non-filing) using Get Transcript. 

You can also ask the IRS to mail a return 

or an account transcript to you. Only the 

mail option is available by choosing the 

Tax Records option on the IRS2Go app by 

selecting Mail Transcript on IRS.gov or by 

calling 1-800-908-9946. Tax return and tax 

account transcripts are generally available 

for the current year and the past three 

years.

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 $300,000 or less if 

married ling jointly or qualifying widow(er), $275,000 or less if head of household, $250,000 or less if 

single, or $150,000 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% (.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% (.80) 

Enter the smaller of line 38 or line 40

Subtract $300,000 if married ling jointly or qualifying widow(er), $275,000 if head of household, 

$250,000 if single, or $150,000 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

Page 18 Publication 536 (2013)
Determine if you are eligible for the EITC 

and estimate the amount of the credit with 

the Earned Income Tax Credit (EITC) 

Assistant.

Visit Understanding Your IRS Notice or 

Letter to get answers to questions about a 

notice or letter you received from the IRS.

If you received the First Time Homebuyer 

Credit, you can use the First Time 

Homebuyer Credit Account Look­up tool 

for information on your repayments and account balance.

Check the status of your amended return 

using Where's My Amended Return? Go to 

IRS.gov and enter Where's My Amended 

Return? in the search box. You can generally expect your amended return to be processed up to 12 weeks from the date we 

receive it. It can take up to 3 weeks from 

the date you mailed it to show up in our 

system.

Make a payment using one of several safe 

and convenient electronic payment options 

available on IRS.gov. Select the Payment 

tab on the front page of IRS.gov for more 

information.

Determine if you are eligible and apply for 

an online payment agreement, if you owe 

more tax than you can pay today.

Figure your income tax withholding with 

the IRS Withholding Calculator on IRS.gov. 

Use it if you've had too much or too little 

withheld, your personal situation has 

changed, you're starting a new job or you 

just want to see if you're having the right 

amount withheld.

Determine if you might be subject to the Alternative Minimum Tax by using the 

Alternative Minimum Tax Assistant on 

IRS.gov.

Request an Electronic Filing PIN by going to IRS.gov and entering Electronic Filing PIN in the search box.

Download forms, instructions and publications, including accessible versions for 

people with disabilities.

Locate the nearest Taxpayer Assistance 

Center (TAC) using the Office Locator tool 

on IRS.gov, or choose the Contact Us option on the IRS2Go app and search Local 

Offices. An employee can answer questions about your tax account or help you 

set up a payment plan. Before you visit, 

check the Office Locator on IRS.gov, or 

Local Offices under Contact Us on IRS2Go 

to confirm the address, phone number, 

days and hours of operation, and the services provided. If you have a special need, 

such as a disability, you can request an appointment. Call the local number listed in 

the Office Locator, or look in the phone 

book under United States Government, Internal Revenue Service.

Apply for an Employer Identification 

Number (EIN). Go to IRS.gov and enter 

Apply for an EIN in the search box.

Read the Internal Revenue Code, regulations, or other official guidance.

Read Internal Revenue Bulletins.

Sign up to receive local and national tax 

news and more by email. Just click on 

“subscriptions” above the search box on 

IRS.gov and choose from a variety of options.

Phone. You can call the IRS, or you can carry 

it in your pocket with the IRS2Go app on your 

smart phone or tablet. Download the free 

IRS2Go app from the iTunes app store or from 

Google Play.

Call to locate the nearest volunteer help 

site, 1-800-906-9887 or you can use the 

VITA Locator Tool on IRS.gov, or download the IRS2Go app. Low-to-moderate income, elderly, people with disabilities, and 

limited English proficient taxpayers can get 

free help with their tax return from the nationwide Volunteer Income Tax Assistance 

(VITA) program. The Tax Counseling for 

the Elderly (TCE) program helps taxpayers 

age 60 and older with their tax returns. 

Most VITA and TCE sites offer free electronic filing. Some VITA and TCE sites provide IRS-certified volunteers who can help 

prepare your tax return. Through the TCE 

program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to 

find the nearest Tax-Aide location.

Call the automated Where's My Refund? 

information hotline to check the status of 

your 2013 refund 24 hours a day, 7 days a 

week at 1-800-829-1954. If you e-file, you 

can start checking on the status of your return within 24 hours after the IRS receives 

your tax return or 4 weeks after you've 

mailed a paper return. The IRS issues 

more than 9 out of 10 refunds in less than 

21 days. Where's My Refund? will give you 

a personalized refund date as soon as the 

IRS processes your tax return and approves your refund. Before you call this automated hotline, have your 2013 tax return 

handy so you can enter your social security number, your filing status, and the exact 

whole dollar amount of your refund. The 

IRS updates Where's My Refund? every 

24 hours, usually overnight, so you only 

need to check once a day. Note, the above 

information is for our automated hotline. 

Our live phone and walk-in assistors can 

research the status of your refund only if 

it's been 21 days or more since you filed 

electronically or more than 6 weeks since 

you mailed your paper return.

Call the Amended Return Hotline, 

1-866-464-2050, to check the status of 

your amended return. You can generally 

expect your amended return to be processed up to 12 weeks from the date we 

receive it. It can take up to 3 weeks from 

the date you mailed it to show up in our 

system.

Call 1-800-TAX-FORM (1-800-829-3676) 

to order current-year forms, instructions, 

publications, and prior-year forms and instructions (limited to 5 years). You should 

receive your order within 10 business 

days.

Call TeleTax, 1-800-829-4477, to listen to 

pre-recorded messages covering general 

and business tax information. If, between 

January and April 15, you still have questions about the Form 1040, 1040A, or 

1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and 

IRAs or self-employment taxes), call 

1-800-829-1040.

Call using TTY/TDD equipment, 

1-800-829-4059 to ask tax questions or order forms and publications. The TTY/TDD 

telephone number is for people who are 

deaf, hard of hearing, or have a speech 

disability. These individuals can also contact the IRS through relay services such as 

the Federal Relay Service.

Walk-in. You can find a selection of forms, 

publications and services — in person.

Products. You can walk in to some post offices, libraries, and IRS offices to pick up 

certain forms, instructions, and publications. Some IRS offices, libraries, and city 

and county government offices have a collection of products available to photocopy 

from reproducible proofs.

Services. You can walk in to your local 

TAC for face-to-face tax help. An employee can answer questions about your 

tax account or help you set up a payment 

plan. Before visiting, use the Office Locator 

tool on IRS.gov, or choose the Contact Us 

option on the IRS2Go app and search Local Offices for days and hours of operation, 

and services provided.

Mail. You can send your order for forms, instructions, and publications to the address below. You should receive a response within 10 

business days after your request is received.

Internal Revenue Service

1201 N. Mitsubishi Motorway

Bloomington, IL 61705-6613

The Taxpayer Advocate Service Is Here to Help 

You. The Taxpayer Advocate Service (TAS) 

is your voice at the IRS. Our job is to ensure 

that every taxpayer is treated fairly and that you 

know and understand your rights.

What can TAS do for you? We can offer you 

free help with IRS problems that you can't resolve on your own. We know this process can 

be confusing, but the worst thing you can do is 

nothing at all! TAS can help if you can't resolve 

your tax problem and:

Your problem is causing financial difficulties for you, your family, or your business.

You face (or your business is facing) an 

immediate threat of adverse action.

You've tried repeatedly to contact the IRS 

but no one has responded, or the IRS 

hasn't responded by the date promised.

If you qualify for our help, you'll be assigned to 

one advocate who'll be with you at every turn 

and will do everything possible to resolve your 

problem. Here's why we can help:

TAS is an independent organization within 

the IRS.

Our advocates know how to work with the 

IRS.

Our services are free and tailored to meet 

your needs.

We have offices in every state, the District 

of Columbia, and Puerto Rico.

Publication 536 (2013) Page 19
How can you reach us? If you think TAS can 

help you, call your local advocate, whose number is in your local directory and at Taxpayer 

Advocate, or call us toll-free at 1-877-777-4778.

How else does TAS help taxpayers?

TAS also works to resolve large-scale, systemic 

problems that affect many taxpayers. If you 

know of one of these broad issues, please report it to us through our Systemic Advocacy 

Management System.

Low Income Taxpayer 

Clinics

Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level 

and need to resolve tax problems such as audits, 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. Visit Taxpayer Advocate or see IRS 

Publication 4134, Low Income Taxpayer Clinic 

List.

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 7

Carryback period 3

Carryforward period 3

Carryover from 2012 to 2013:

Estates and trusts 16

Worksheet instructions 16

Claiming an NOL deduction 7

D

Deducting a carryback 8

Deducting a carryforward 8

Domestic production activities 

deduction 3, 12

E

Eligible loss 3

F

Farming business 3

Farming loss 3

Figuring an NOL:

Capital losses 3

Carryover 12

Form 1045, Schedule A 2

NOL deduction 3

Nonbusiness deductions 2

Nonbusiness income 3

Filing status, change in 9

Form 1045, Schedule A 2

Form 1045, Schedule B 12

Forms and schedules:

Form 1040X 8

Form 1045 8

Form 1045, Schedule A 2

Form 1045, Schedule B 12

Free tax services 18

Future developments 1

H

Help (See Tax help)

How to carry an NOL back or forward 7

How to figure an NOL 2

I

Illustrated forms and schedules:

Form 1045 9

Form 1045, Schedule A 3

Form 1045, Schedule B 12

M

Marital status, change in 8

Missing children, photographs of 1

Modified taxable income 12

N

NOL resulting in no taxable income 8

NOL year 1, 3

P

Publications (See Tax help)

Q

Qualified disaster loss 7

Qualified small business 3

R

Refiguring tax 8

S

Specified liability loss 7

Steps in figuring NOL 2

T

Tax help 18

W

Waiving the 10-year carryback 7

Waiving the 5-year carryback 3

Waiving the carryback period 7

When to use an NOL 3

Worksheet:

(Continued) 18

Carryover from 2012 to 2013 17

Page 20 Publication 536 (2013)