Amt Nol

[GTS1101]

I am currently working on a client's tax return for 2008 who has a NOL of approx (286,000) The client is not affected by AMT in 2008 and does not owe any Alt Min Tax for 2008. The client would like to carry back two years to 2006. I carried back the NOL to 2006 and when I did that and went back to recompute 2006 tax return to fill out form 1045, I put the NOL on line 21 other income. When I did that it also added this amount to form 6251 on line 10 and it wiped out all of the additional refund created from the NOL in 2006. The AGI for 2006 was approx 15,000,000. All of the NOL will be used up in 2006.

Because the client is not subject to AMT in 2008 does that mean I don't compute an AMT NOL carryback? Or do I still use the formula in the line 6251 instructions to compute an AMT NOL carryback to 2006 so that the client does not lose all of the refund created by the regular NOL. It is challenging enough to compute a regular NOL and this AMT NOL is getting very complicated. Any advice you could give would be greatly appreciated.

Thank You!

GTS1101

[JG EA]

I am currently working on a client's tax return for 2008 who has a NOL of approx (286,000) The client is not affected by AMT in 2008 and does not owe any Alt Min Tax for 2008. The client would like to carry back two years to 2006. I carried back the NOL to 2006 and when I did that and went back to recompute 2006 tax return to fill out form 1045, I put the NOL on line 21 other income. When I did that it also added this amount to form 6251 on line 10 and it wiped out all of the additional refund created from the NOL in 2006. The AGI for 2006 was approx 15,000,000. All of the NOL will be used up in 2006.

Because the client is not subject to AMT in 2008 does that mean I don't compute an AMT NOL carryback? Or do I still use the formula in the line 6251 instructions to compute an AMT NOL carryback to 2006 so that the client does not lose all of the refund created by the regular NOL. It is challenging enough to compute a regular NOL and this AMT NOL is getting very complicated. Any advice you could give would be greatly appreciated.

Thank You!

GTS1101

Yes, you need to fill in the AMT NOL on form 6251 for 2006 and anything else that may apply to the AMT in that year's return.
Here's the instructions for 6251 (In 2006 it would be line 27)
"Line 28—Alternative Tax Net Operating Loss Deduction (ATNOLD)
The ATNOLD is the sum of the alternative tax net operating loss (ATNOL) carryovers and carrybacks to the tax year, subject to the limitation explained later on this page. Figure your ATNOLD as follows... "

Worksheets help. There are some you can get from NATP if you are a member.