Opinion ID: 814015
Heading Depth: 4
Heading Rank: 2

Heading: 90 percent of alternative

Text: minimum taxable income determined without regard to such deduction, plus (ii) the lesser of– 5 The version of § 56(d) that applies to M etro in this case is the version of § 56 as enacted by the Job Creation and W orker Assistance Act of 2002, Pub. L. 107-147, § 102(c) (2002) and amended by the W orking Families Tax Relief Act of 2004, Pub. L. 108-311, § 403(b) (2004). Unless otherwise indicated, all citations to I.R.C. § 56 refer to that version, which we refer to (for the sake of convenience) as the “Relief Rule,” because it provided tax relief by permitting AMT taxpayers to use NOLs to reduce their tax liability. References to the “original” Relief Rule refer to the version of the Rule enacted by the Job Creation and W orker Assistance Act of 2002, unamended by the W orking Families Tax Relief Act of 2004. Congress eliminated the Relief Rule in 2009. See infra note 13. METRO ONE V . CIR 7 (I) the amount of such deduction attributable to the sum of carrybacks of net operating losses from taxable years ending during 2001 or 2002 and carryovers of net operating losses to taxable years ending during 2001 and 2002 . . . . Job Creation and Worker Assistance Act of 2002, Pub. L. 107-147, § 102(c) (2002) [hereinafter Jobs Act of 2002], as amended by Working Families Tax Relief Act of 2004, Pub. L. 108-311, § 403(b) (2004) [hereinafter Tax Relief Act of 2004] (emphasis added). This section limits the amount of the ATNOLD that can be claimed by a taxpayer who is subject to the AMT. In general, this limit is 90% of the taxpayer’s alternative minimum taxable income (AMTI), or the amount of NOLs, whichever is lesser. Id. § 56(d)(1)(A)(i). On the other hand, under the Relief Rule, there is no limit (up to the amount of taxable income) on the amount of the ATNOLD that a taxpayer can claim in a given taxable year, if those NOLs are carried from 2001 or 2002 to an earlier tax year (“carrybacks”), or to 2001 or 2002 from an earlier tax year (“carryovers”). Id. § 56(d)(1)(A)(ii). Ultimately, we address here whether the term “carryovers of net operating losses” in the Relief Rule includes (1) both NOLs that are carried to a later tax year (“carryforwards”) and NOLs that are carried to a preceding tax year (“carrybacks”), or (2) only carryforwards. Metro argues that “carryovers” means both carryforwards and carrybacks, and therefore it was entitled to use NOLs from 2003 and 2004 as “carrybacks” to offset 100% of its taxable income in 2002. The Commissioner disagrees, arguing that, as used in the Relief Rule, “carryovers” is a synonym for carryforwards, so the amount of the 2002 ATNOLD attributable to NOLs that 8 METRO ONE V . CIR Metro carried back from 2003 and 2004 was, like any other NOL carried under § 172, limited to 90% of Metro’s 2002 AMTI. Thus, under the Commissioner’s interpretation, Metro would be able to carry back only $11,182,013.00 of its 2004 NOLs to 2002. That amount would increase to $14,332,806.00 under Metro’s interpretation of the Relief Rule, because the ATNOLD would not be limited to 90% of Metro’s 2002 AMTI. Therefore, if Metro is correct, it would be able to claim an additional $3,150,793.00 ATNOLD against its 2002 AMTI, reducing its taxable income for that year to $0.00. However, the plain meaning of “carryovers” indicates that the Relief Rule does not apply to NOLs that are carried back under these circumstances. We therefore affirm the Tax Court.