ATNOLAlternative Tax Net Operating Loss
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The ATNOL attributable to a year in which a WHBAA election was made, limited to AMTI minus the amount from 1 (WHBAA-year ATNOL).
56(d)(1)(B)(ii) has provided that any portion of an ATNOL that cannot be used in a particular year due to the 90% limitation may be carried over to other tax years.
The Joint Committee on Taxation's technical explanation of the WHBAA (JCX-44-09) explained that the 90% limitation for ATNOLDs is suspended with respect to any portion of the ATNOLD that is a WHBAA-year ATNOL.
The amount of ATNOL that can be claimed as a reduction to AMTI is limited to 90% of the taxpayers AMTI determined without regard to the ATNOL.
Solution: To make the election to carry an NOL and ATNOL forward without first carrying it back, the election must have been made with the original loss year return, or filed with a Form 1040X within six months of the original due date (excluding extensions) of the loss year return.
Example 1: Corporation X has taxable income of $1 million before the charitable deduction, with no NOL or ATNOL carryovers.
The uncertainty surrounding the ordering rules of the 10% limit on the charitable deduction and the 90% limit on the ATNOL deduction has been affecting more corporate taxpayers as the economy recovers and these corporations start generating current-period taxable income.
As these corporations recover and generate taxable income, the use of these carryover items is becoming more prevalent, and one of the issues arising is the interplay of the 10% limit on charitable deductions and the 90% limit on ATNOLs.
The ATNOL must be carried to the same tax year as the NOL.
Jack could utilize $90,000 of his ATNOL in that year and carry forward the remaining $70,000 to the next year.
172(b)(1)(H) election is made, Y will have an AMT liability of $12,000 for 2010, an NOL carryforward of $3 million, and an ATNOL carryforward of $3.
Y will also have an NOL carryforward of $3 million and an ATNOL carryforward of $3 million for 2011.