In general, ACE is comprised of AMTI before the ACE adjustment and any AMT Net Operating Loss deduction
, plus or minus several adjustments relating to corporate earnings and profits.
In order to give effect to the deductions disallowed under section 56(d)(1)(A)(i), a minimum tax credit net operating loss deduction
(MTCNOLD) has to be entered on line 3 of Form 8801.
However, rental losses that are limited under the passive activity rules are also suspended in determining the net operating loss deduction
These accounting requirements, if satisfied, will result in the creation of a corporate asset for deferred taxes equal to the expected value of the loss as well as a corresponding increase in net worth for accounting purposes, without any reduction in the amount of the available net operating loss deduction
for income tax purposes.
The Schedule M-1 reconciliation does not include the net operating loss deduction
or other special deductions, such as the deduction for dividends received, because these two items are subtracted from tax net income in order to determine "income subject to tax," the actual tax base.
US 1072, in which it was held that an embezzler could not claim a net operating loss deduction
for repayment of embezzled funds, as embezzlement was not a "trade or business" for Sec.
7] For 2000, statutory special deductions include the following: net operating loss deduction
(NOLD); the various dividends received deductions; the deductions for dividends paid on certain preferred stock of public utilities; the deduction for dividends paid by regulated investment companies and real estate investment trusts; the special deduction for taxes paid by real estate investment trusts allowed under Internal Revenue Code section 857; and the special deduction allowed for small life insurance companies.
Alimony is a nonbusiness deduction regardless of the source of the payment and whether or not the payor has taxable income, although it cannot generate a net operating loss deduction
See revised 1998 data in Figure A, and refer to the section, "Adjustments to Taxpayer Misreporting of Net Operating Loss Deduction
," for an explanation of how erroneous taxpayer reporting of this deduction has affected previous years' statistics and how this was corrected during SOI processing of Tax Year 1999 returns that are the basis for this article.
Schedule M-1 reconciliation does not include the net operating loss deduction
or other special deductions such as the deduction for dividends received as these two items are subtracted from tax net income in order to determine "income subject to tax," the actual tax base.
4-billion net operating loss deduction
(NOLD), up by $5.