Akeem,who does not itemize,incurred a net operating loss (NOL)of $50,000 in 2010.His deductions in 2010 included AMT tax preference items of $20,000,and he had no AMT adjustments.Assuming the NOL is not carried back,what is Akeem's ATNOLD carryover to 2011?
A)$50,000.
B)$30,000.
C)$20,000.
D)$40,000.
E)None of the above.

Question

Quizplus · Accepted Answer

AMT tax preference items are not deductible for regular tax purposes but are deductible for AMT purposes. Therefore, Akeem's taxable income for regular tax purposes will be reduced by the NOL and his AMT taxable income will be reduced by $30,000 ($50,000 - $20,000). Since the AMT taxable income is lower, the ATNOLD carryover will be based on the AMT NOL. Therefore, the ATNOLD carryover to 2011 will be $30,000.

Akeem,who Does Not Itemize,incurred a Net Operating Loss (NOL)of $50,000