NOL Carryover workpaper print requirements
The NOL Carryover workpaper prints when a corporation's current-year charitable contribution deduction is limited under the 10% taxable income rule and part or all of that contribution converts to a net operating loss (NOL) carryover.
Special rules apply to contribution carryovers when a corporation has an NOL carryover to the current tax year. When you calculate the charitable contribution deduction for the current year, apply the 10% taxable income limit without factoring in any NOL deduction.
To print the NOL Carryover workpaper for Form 1120, page 1, line 19 (charitable contributions):
- Drill down on Form 1120, page 1, line 19. The application opens a workpaper and automatically computes the NOL carryover when it applies.
- To enter a carryover for a contribution that converted to NOL in a parent or subsidiary return, go to tab.
- Do a full recompute, then print.
Example 1: No taxable income remains after the NOL deduction and before contributions
If no taxable income remains before you consider contributions, the corporation can't take a current-year contributions deduction. Instead, the full amount of contributions that the corporation would have deducted if there were no NOL deduction converts to an NOL carryover. This results in a full conversion of contributions to NOL.
Example 2: Taxable income after the NOL deduction and before contributions is greater than or equal to contributions
If the contribution amount that the corporation would have deducted without the NOL deduction is less than or equal to the taxable income remaining after the NOL deduction, no contributions convert to an NOL carryover.
Example 3: Taxable income after the NOL deduction and before contributions is positive
If taxable income remains after the NOL deduction and before you consider contributions, limit the contributions deduction to 10% of that remaining taxable income. The corporation also converts part of the contributions to an NOL carryover. To calculate the converted amount, subtract the taxable income remaining after the NOL deduction from the contribution amount that the corporation would have deducted without the NOL deduction.
