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).
The following examples illustrate the IRS's view in FAA 20144201F: Example 1: Corporation A has an ATNOL from 2008 of $100, an ATNOL from 2009 of $200, and an ATNOL from 2010 of $100.
* First, X must consider its oldest ATNOL, from 2008, for which no WHBAA election was made.
Since the positive depreciation adjustment increased his AMTI, it reduces his NOL by that amount to yield an ATNOL of $160,000.
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.
Since the positive depreciation adjustment increases his AMTI, it reduces his NOL by that amount to yield an ATNOL of $160,000.
The ATNOL must be carried to the same tax year as the NOL.
Y will also have an NOL carryforward of $3 million and an ATNOL carryforward of $3 million for 2011.
Z will now have an NOL carryforward of $5 million, a normal (limited to 90% of AMTI) ATNOL carryforward of $2.1 million, and an electing ATNOL carryforward of $2.9 million, all to 2012.