U.S. Income Tax Return for Estates and Trusts

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Instructions for Form 172
(Rev. December 2024)

Net Operating Losses (NOLs) for Individuals, Estates, and Trusts
For use with Form 172 (Rev. December 2024) or later revision

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Section references are to the Internal Revenue Code unless
otherwise noted.

of the partnership’s or S corporation’s business income and
business deductions to figure their individual NOLs.

Future Developments

Carrying back an NOL to an earlier tax year may create
an alternative minimum tax (AMT) liability for that earlier
CAUTION year. This may be true even if there was no AMT liability
on the tax return filed for that earlier year.

For the latest information about developments related to Form
172 and its instructions, such as legislation enacted after they
were published, go to IRS.gov/Form172.

What’s New

This form was created for taxpayers (other than corporations) to
figure the amount of net operating loss that is available to carry
back or carry forward.

Reminders

NOL carryback eliminated. Generally, you can only carry
NOLs arising in tax years after 2020 to a later year. An exception
applies to certain farming losses, which may be carried back 2
years. See section 172(b) and Pub. 225, Farmer’s Tax Guide.

NOL deduction limitation. In general, your NOL deduction for
tax years beginning after December 31, 2020, cannot exceed the
sum of: (1) the NOLs carried to the year from tax years beginning
before January 1, 2018; plus, (2) the lesser of: (a) the NOLs
carried to the year from tax years beginning after December 31,
2017, or (b) 80% of the excess (if any) of taxable income
computed without regard to deductions for NOLs, or Qualified
Business Income (QBI), or section 250 deductions, over the
NOLs carried to the year from tax years beginning before
January 1, 2018.

General Instructions
Purpose of Form

Individuals, estates, and trusts use Form 172 to figure the
amount of the NOL that is available for carrying back or forward.
If your deductions for the year are more than your income for
the year, you may have a net operating loss. An NOL year is the
year in which an NOL occurs. You can use an NOL by deducting
it from your income in another year or years.
To have an NOL, your loss must generally be caused by
deductions from your:
• Trade or business,
• Work as an employee (although not deductible for most
taxpayers for 2018 through 2025),
• Casualty and theft losses resulting from a federally declared
disaster,
• Moving expenses (although not deductible for most taxpayers
for 2018 through 2025), or
• Rental property.
A loss from operating a business is the most common reason
for an NOL.
Partnerships and S corporations generally can’t use an NOL.
However, partners or shareholders can use their separate shares
Nov 26, 2024

!

Carrying back an NOL to tax year 2021 may create an
excess advance child tax credit (CTC) payment, based
CAUTION on the refigured adjusted gross income (AGI) and
Modified AGI (MAGI). With the NOL reduction in MAGI, however,
repayment protection under section 24(j) may reduce the amount
of tax you owe, based on certain income thresholds. See the
2021 Instructions for Schedule 8812 (Form 1040) for more
details.

!

Individuals, estates, and trusts that carry NOLs back to
years in which they have a section 965(a) inclusion (“965
CAUTION year”) may not use this form. You must use an amended
return to carry back to such years.

!

Keeping records. You should keep records for any tax year that
generates an NOL for 3 years after you have used the carryback/
carryforward or 3 years after the carryforward expires.

Election to waive carryback. A taxpayer may elect to waive
carrybacks. See section 172 for details.

NOL Steps

Follow Steps 1 through 5 to figure and use your NOL.
Step 1. Complete your tax return for the year. You may have an
NOL if a negative amount appears in these cases.
• Individuals—You subtract your standard deduction or itemized
deductions from your adjusted gross income (AGI).
• Estates and trusts—You combine taxable income, charitable
deductions, income distribution deduction, and exemption
amounts from your Form 1041.
Step 2. Determine whether you have an NOL and its amounts.
See How To Figure an NOL, later. If you do not have an NOL,
stop here.
Step 3. If applicable, decide whether to carry the NOL back to a
past year, or to waive the carryback period and instead carry the
NOL forward to a future year. See When To Use an NOL, later.
Step 4. Deduct the NOL in the carryback or carryforward year.
See How to Claim an NOL Deduction, later.
Step 5. Determine the amount of your unused NOL. See How to
Figure an NOL Carryover, later. Carry the unused NOL to the
next carryback or carryforward year and begin again at Step 4.
Note. If your NOL deduction includes more than one NOL
amount, apply Step 5 separately to each NOL amount, starting
with the amount from the earliest year.

How To Figure an NOL

If your deductions for the year are more than your income for the
year, you may have an NOL.

Instructions for Form 172 (Rev. 12-2024) Catalog Number 94487B
Department of the Treasury Internal Revenue Service www.irs.gov

There are rules that limit what you can deduct when figuring
an NOL. In general, the following items are not allowed when
figuring an NOL.
• Capital losses in excess of capital gains.
• The section 1202 exclusion of the gain from the sale or
exchange of qualified small business stock.
• Nonbusiness deductions in excess of nonbusiness income.
• The NOL deduction.
• The section 199A deduction for qualified business income.

can be carried forward indefinitely until used up. This NOL will be
equal to the sum of what remains of the farming loss, plus any
nonfarm NOL, plus any excess business loss for the NOL year.
See Excess Business Loss, later. Start by carrying the NOL to
the first tax year after the NOL year. If you do not use it up, carry
the unused part to the next year. Continue to carry any unused
part of the NOL forward until the NOL is used up.
For nonfarming businesses, since you can’t carry the NOL to
an earlier year, your NOL deduction for tax years beginning after
December 31, 2020, cannot exceed the sum of:
1. The NOLs carried to the year from tax years beginning
before January 1, 2018; plus
2. The lesser of:

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When To Use an NOL

If you have an NOL for a tax year ending after 2020, only the
farming loss portion, if any, can be carried back.

NOL year. This is the year in which the NOL occurred.

Exception to the No Carryback Rule. Farming losses, defined
next, qualify for a 2-year carryback period. Only the farming loss
portion of an NOL can be carried back 2 years. The 80%
limitation rule does not apply to a carryback period before 2021.
Farming business. A farming business is a trade or business
involving cultivation of land or the raising or harvesting of any
agricultural or horticultural commodity. A farming business can
include operating a nursery or sod farm or raising or harvesting
most ornamental trees or trees bearing fruit, nuts, or other crops.
The raising, shearing, feeding, caring for, training, and
management of animals is also considered a farming business.
A farming business does not include contract harvesting of an
agricultural or horticultural commodity grown or raised by
someone else. It also does not include a business in which you
merely buy or sell plants or animals grown or raised entirely by
someone else.
Farming loss. A farming loss is the smaller of:
• The amount that would be the NOL for the tax year if only
income and deductions from farming businesses (as defined in
section 263A(e)(4)) were taken into account, or
• The NOL for the tax year.

Annual losses limited. Noncorporate taxpayers may be
subject to excess business loss limitations. For more information
see Excess Business Loss, later.

Waiving the Carryback Period

To make this choice, attach a statement to your original return
filed by the due date (including extensions) for the NOL year.
This statement must show that you are choosing to waive the
carryback period under section 172(b).
If you filed your original return on time but did not file the
statement with it, you can make this choice on an amended
return filed within 6 months of the due date of the return
(excluding extensions). Attach a statement to your amended
return, and write “Filed pursuant to section 301.9100-2” at the
top of the statement.
Once you choose to waive the carryback period, it is
generally irrevocable. The election must be made by the due
date of the return, including extensions.

!

If you do not file this statement on time, you cannot
waive the carryback period.

CAUTION

How to Carry an NOL Back or Forward

If you choose to carry back a farming loss, you must first carry
the farming loss to the earliest year in the 2-year carryback
period. If the farming loss is not used up, you can carry the rest
to the next earliest carryback year, and then on to carryover
years after the loss year, and so on.
If you waive the carryback period or do not use up all of the
farming loss in the carryback period, you will have an NOL that

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a. The NOLs carried to the year from tax years beginning
after December 31, 2017, or
b. 80% of the excess (if any) of taxable income computed
without regard to deductions for NOLs, or Qualified Business
Income (QBI), or section 250 deductions, over the NOLs
carried to the year from tax years beginning before January
1, 2018.

Only NOLs arising after 2017 and carried forward to a year
after 2020 are subject to the 80%-of-taxable-income limit. The
total amount of any NOL deduction for 2021 or thereafter that is
attributable to NOLs from tax years after 2017 can’t exceed 80%
of taxable income without regard to the NOL deduction or
sections 199A or 250.

How to Claim an NOL Deduction

If you carried the NOL to an earlier year, your NOL deduction is
the carried over NOL minus the NOL amount you used in the
earlier year or years. If you carry more than one NOL to the same
year, your NOL deduction is the total of these carrybacks and
carryovers.

NOL resulting in no taxable income. If your NOL is more than
the taxable income of the year you carry it to (figured before
deducting the NOL), you will generally have an NOL carryover to
the next year. See How to Figure an NOL Carryover, later, to
determine how much NOL you have used and how much you
carry to the next year.

Deducting a Carryback

If you carry back your NOL, you can use either Form 1045 or
Form 1040-X. You can get your refund faster by using Form
1045, but you have a shorter time to file it and because it is not
treated as a claim for credit or refund, you may need to file a
claim for credit or refund (such as Form 1040-X) if your
application on Form 1045 is disallowed. For more information,
see the Instructions for Form 1045. You can use Form 1045 to
apply an NOL to all carryback years. If you use Form 1040-X,
you must use a separate Form 1040-X for each carryback year
to which you apply the NOL.
Estates and trusts that do not file Form 1045 must file an
amended Form 1041 (instead of Form 1040-X) for each
carryback year to which NOLs are applied. Use a copy of the
appropriate year's Form 1041, check the Net operating loss
carryback box, and follow the Form 1041 instructions for
amended returns. Include the NOL deduction with other
deductions not subject to the 2% limit. Also, see the special
procedures for filing an amended return due to an NOL
carryback, explained under Form 1040-X, later.
Carrying back an NOL to an earlier tax year may create
an alternative minimum tax (AMT) liability for that earlier
CAUTION year. This may be true even if there was no AMT liability
on the tax return filed for that earlier year.

!

Form 1045. You can apply for a quick refund by filing Form
1045. This form results in a tentative adjustment of tax in the
carryback year.
If the IRS refunds or credits an amount to you from Form 1045
and later determines that the refund or credit is too much, the
IRS may assess and collect the excess immediately.
Generally, you must file Form 1045 on or after the date you
file your tax return for the NOL year, but not later than 1 year after
the end of the NOL year. If the last day of the NOL year falls on a
Saturday, Sunday, or holiday, the form will be considered timely
filed if postmarked on the next business day.

5. Multiply the refigured tax on your joint return by the
amount figured in (4). This is your share of the joint tax liability.
Figuring your contribution toward tax paid. Unless you
have an agreement or clear evidence of each spouse's
contributions toward the payment of the joint tax liability, figure
your contribution by adding the tax withheld on your wages and
your share of joint estimated tax payments or tax paid with the
return. If the original return for the carryback year resulted in an
overpayment, reduce your contribution by your share of the tax
refund. Figure your share of a joint payment or refund by the
same method used in figuring your share of the joint tax liability.
Use your taxable income as originally reported on the joint return
in steps 1 and 2 above, and substitute the joint payment or
refund for the refigured joint tax in step 5.

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CAUTION

If you were affected by a federally declared disaster, you
may have additional time to file your Form 1045. For
more information, go to IRS.gov/DisasterTaxRelief.

Attach Form 172 to your Form 1045 if it applies.

Form 1040-X If you do not file Form 1045, you can file Form
1040-X to get a refund of tax because of an NOL carryback.
Generally, file Form 1040-X for the carryback year within 3 years
after the due date, including extensions, for filing the return for
the NOL year.

!

Filing Form 1040-X does not extend the carryback
period. See When To Use an NOL, earlier.

CAUTION

Attach a Form 172 for each NOL to your Form 1040-X if it
applies to the computation of your NOL.

Deducting a Carryforward

If you carry forward your NOL to a tax year after the NOL year,
list your NOL deduction as a negative figure on Schedule 1
(Form 1040) for the year to which the NOL is carried. Estates
and trusts, include an NOL deduction on Form 1041.

Attach a Form 172 for each NOL to your Form 1040 or Form
1041 if it applies.

Change in Marital Status

If you and your spouse were not married to each other in all
years involved in figuring NOL carrybacks and carryovers, only
the spouse who had the loss can take the NOL deduction. If you
file a joint return, the NOL deduction is limited to the income of
that spouse.
For example, if your marital status changes because of death
or divorce, and in a later year you have an NOL, you can carry
back that loss only to the part of the income reported on the joint
return (filed with your former spouse) that was related to your
taxable income. After you deduct the NOL in the carryback year,
the joint rates apply to the resulting taxable income.
Refund limit. If you are not married in the NOL year (or are
married to a different spouse), and in the carryback year you
were married and filed a joint return, your refund for the overpaid
joint tax may be limited. You can claim a refund for the difference
between your share of the refigured tax and your contribution
toward the tax paid on the joint return. The refund cannot be
more than the joint overpayment. Attach a statement showing
how you figured your refund.
Figuring your share of a joint tax liability. There are five
steps for figuring your share of the refigured joint tax liability.
1. Figure your total tax as though you had filed as married
filing separately.
2. Figure your spouse's total tax as though your spouse also
had filed as married filing separately.
3. Add the amounts in (1) and (2).
4. Divide the amount in (1) by the amount in (3).

Change in Filing Status

If you and your spouse were married and filed a joint return for
each year involved in figuring NOL carrybacks and carryovers,
figure the NOL deduction on a joint return as you would for an
individual. However, treat the NOL deduction as a joint NOL.
If you and your spouse were married and filed separate
returns for each year involved in figuring NOL carrybacks and
carryovers, the spouse who sustained the loss may take the
NOL deduction on a separate return.

Special rules apply for figuring the NOL carrybacks and
carryovers of married people whose filing status changes for any
tax year involved in figuring an NOL carryback or carryover.
Separate to joint return. If you and your spouse file a joint
return for the tax year, and were married but filed separate
returns for any of the tax years involved in figuring the NOL
carryback or carryover, treat the separate carryback or carryover
as a joint carryback or carryover.

Joint to separate returns. If you and your spouse file separate
returns for a tax year, but filed a joint return for any or all of the
tax years involved in figuring the NOL carryover, figure each of
your carryovers separately by separating the NOL portion for
each spouse from within the joint return. Because the joint NOL
is being carried to a tax year involving separate returns, the
separate NOL of each spouse must be figured.
Joint return in NOL year. Figure each spouse's share of the
joint NOL through the following steps.
1. Figure each spouse's NOL as if he or she filed a separate
return. See How To Figure an NOL, earlier. If only one spouse
has an NOL, stop here. All of the joint NOL is that spouse's NOL.
2. If both spouses have an NOL, multiply the joint NOL by a
fraction, the numerator of which is spouse A's NOL figured in (1)
and the denominator of which is the total of the spouses' NOLs
figured in (1). The result is spouse A's share of the joint NOL.
The rest of the joint NOL is spouse B's share.
Example 1. Mark and Nancy are married and file a joint
return for the current tax year. They have an NOL of $5,000 from
a farming business. They carry the NOL back to the second
preceding tax year, a year in which Mark and Nancy filed
separate returns. Figured separately, Nancy's current tax year
deductions were more than her income, and Mark's income was
more than his deductions. Mark does not have any NOL to carry
back. Nancy can carry back the entire $5,000 NOL to her
separate return for the second preceding tax year.
Example 2. Assume the same facts as in Example 1, except
that both Mark and Nancy had deductions in the current tax year
that were more than their income. Figured separately, his NOL is
$1,800 and her NOL is $3,000. The sum of their separate NOLs
($4,800) is less than their $5,000 joint NOL because his
deductions included a $200 net capital loss that is not allowed in
figuring his separate NOL. The loss is allowed in figuring their
3

joint NOL because it was offset by Nancy's capital gains. Mark's
share of their $5,000 joint NOL is $1,875 ($5,000 ×
$1,800/$4,800) and Nancy's is $3,125 ($5,000 − $1,875).

How to Figure an NOL Carryover

If your NOL is more than your taxable income for the year to
which you carry it (figured before deducting the NOL), you may
have an NOL carryover. You must make certain modifications to
your taxable income to determine how much NOL you will use up
in that year and how much you can carry over to the next tax
year. Your carryover is the excess of your NOL deduction over
your modified taxable income for the carryback or carryforward
year. If your NOL deduction includes more than one NOL, apply
the NOLs against your modified taxable income in the same
order in which you incurred them, starting with the earliest.

The taxpayer completes Form 461 and determines that they
have incurred an excess business loss of $738,000. The
taxpayer reports the excess business loss as a positive number
on Schedule 1 (Form 1040 or 1040-SR) – effectively offsetting
part of the loss claimed on Schedule C. This excess business
loss of $738,000 will be treated as an NOL carryover to the next
tax year. The taxpayer must then complete the NOL Carryover
with an Excess Business Loss Worksheet below to figure the
total NOL carryover from the current tax year to the next tax year.

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Modified taxable income. Your modified taxable income is
your taxable income figured with the following changes.
1. You cannot claim an NOL deduction for the NOL
carryover you are figuring or for any later NOL.
2. You cannot claim a deduction for capital losses in excess
of your capital gains. Also, you must increase your taxable
income by the amount of any section 1202 exclusion.
3. You cannot claim a deduction for your exemptions for
yourself, your spouse, or your dependents.
4. You must figure any item affected by the amount of your
AGI after making the changes in (1), (2), and (3) above, and
certain other changes to your AGI that result from (1), (2), and
(3). This includes income and deduction items used to figure AGI
(for example, IRA deductions), as well as certain itemized
deductions. To figure a charitable contribution deduction, do not
include deductions for NOL carrybacks in the change in (1) but
do include deductions for NOL carryforwards from tax years
before the NOL year.
Your taxable income as modified cannot be less than zero.
You can use Form 172, Part II, to figure your modified taxable
income for carryback years and your carryover from each of
those years.

Excess Business Loss

Noncorporate taxpayers may be subject to excess business loss
limitations. The at-risk limits and the passive activity limits are
applied before figuring the amount of any excess business loss.
An excess business loss is the amount by which the total
deductions attributable to all of your trades or businesses
exceed your total gross income and gains attributable to those
trades or businesses plus the threshold amount for excess
business losses. The threshold amount for your NOL year can
be found in the Instructions for Form 461. The excess is treated
as an NOL to be carried forward. Further, when carryforwards
can be used, they can only offset 80% of taxable income in
future years. A trade or business includes, but is not limited to,
Schedule C and Schedule F activities, and certain activities
reported on Schedule E. (In the case of a partnership or S
corporation, although the limitation is applied at the partner or
shareholder level, the trade or business determination is made at
the entity’s level.) Business gains and losses reported on
Schedule D and Form 4797 are included in the excess business
loss calculation. Excess business losses that are disallowed are
treated as an NOL carryover to the following tax year. See Form
461 and its instructions for details. For application of these rules
to farmers, see also Pub. 225 and the Instructions for Schedule F
(Form 1040 or 1040-SR). Use NOL Carryover with an Excess
Business Loss Worksheet below to figure the total NOL
carryover with an excess business loss.
Example. For the current tax year, an unmarried taxpayer
operates a Schedule C business and incurs a loss of $1 million.
4

NOL Carryover with an Excess Business Loss
Worksheet

For Use by Individuals, Estates, and Trusts (Keep for you records.)

1. Enter the amount from Form 172, line 33, if less than
zero. Enter as a negative number. . . . . . . . . . . . . .
2. Portion of line 1 above that is a loss that was carried
back and used. Enter as a positive number . . . . . . .

3. Enter the total excess business loss from Form 461.
Enter as a negative number . . . . . . . . . . . . . . . . .
4. Combine lines 1 through 3. This is your NOL to carry
over to the next tax year . . . . . . . . . . . . . . . . . . . .

Specific Instructions

Tax Year

Above your name, enter the calendar year or other tax year you
are using. If you are a fiscal year filer using a tax year other than
January 1 through December 31, enter the beginning and ending
months of your fiscal year in the entry space provided.

Address

P.O. box. Enter your box number only if your post office doesn't
deliver mail to your home.
Foreign address. If you have a foreign address, enter the city
name on the appropriate line. Don’t enter any other information
on that line, but also complete the spaces below that line. Don’t
abbreviate the country name. Follow the country’s practice for
entering the postal code and the name of the province, county, or
state.

Part I—NOL

Complete Part I to figure the amount of the NOL that is available
for carryback or carryforward.

Line 2—Nonbusiness Capital Losses

Don't include on this line any section 1202 exclusion amounts
(even if entered as a loss on Schedule D (Form 1041)).

Line 6—Nonbusiness Deductions

Enter as a positive number deductions that aren't connected with
a trade or business. They include:
• Health savings account deduction,
• Archer MSA deduction,
• Deductions for payments on behalf of a self-employed
individual to a SEP, SIMPLE, or qualified plan,
• IRA deductions,
• Alimony paid,
• Most itemized deductions (except for casualty and theft
losses resulting from a federally declared disaster and state
income tax on trade or business income), and
• Standard deduction.

Don't include on line 6 any business deductions. These are
deductions that are connected with a trade or business. They
include:
• State income tax on income from your trade or business
(including wages, salary, and unemployment compensation).
• Moving expenses for members of the Armed Forces on active
duty.
• Educator expenses.
• The deduction for the deductible part of self-employed health
insurance and the deduction for the deductible part of
self-employment tax.
• Rental losses.
• Loss on the sale or exchange of business real estate or
depreciable property.
• Your share of a business loss from a partnership or an S
corporation.
• Ordinary loss on the sale or exchange of section 1244 (small
business) stock.
• Ordinary loss on the sale or exchange of stock in a small
business corporation or a small business investment company.
• If you itemize your deductions, casualty and theft losses
resulting from a federally declared disaster (even if they involve
nonbusiness property).
• Loss on the sale of accounts receivable (if you use an accrual
method of accounting).
• Interest and litigation expenses on state and federal income
taxes related to your business.
• Unrecovered investment in a pension or annuity claimed on a
decedent's final return.
• Payment by a federal employee to buy back sick leave used in
an earlier year.

capital losses are more than your nonbusiness capital gains
without regard to any section 1202 exclusion, you cannot deduct
the excess.
You can deduct your business capital losses (line 11) only up
to the total of:
• Your nonbusiness capital gains that are more than the total of
your nonbusiness capital losses and excess nonbusiness
deductions (line 10), and
• Your total business capital gains without regard to any section
1202 exclusion (line 12).

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Line 7—Nonbusiness Income Other Than
Capital Gains

Enter income that isn't from a trade or business. Examples are
ordinary dividends, annuities, and interest on investments. This
includes:
• Your taxable IRA distributions.
• Pension benefits.
• Social security benefits.
• Annuity income.
• Dividends.
• Interest on investments.
• Your share of nonbusiness income from a partnership or an S
corporation.
Don't enter business income on line 7. This is income from a
trade or business and includes:
• Salaries and wages.
• Self-employment income.
• Unemployment compensation.
• Rental income.
• Gain on the sale or exchange of business real estate or
depreciable property.
• Your share of business income from a partnership or an S
corporation.

Line 23—NOL Deduction for Losses from Other
Years

You cannot deduct any NOL carryovers or carrybacks from other
years. Enter the total amount of your NOL deduction for losses
from other years.

Part II—NOL Carryover

Complete this part to figure the NOL deduction for each
carryback year and the amount to be carried forward, if not fully
absorbed.

If an NOL is more than the modified taxable income for the
earliest year to which it is carried, you must complete Part II to
figure the amount of the NOL to be carried to the next tax year.
The amount of the carryback is the excess, if any, of the NOL
carryback over the modified taxable income for that earlier year.
Modified taxable income is the amount figured on line 9 of Part II.
If you carry two or more NOLs to a tax year, figure your
modified taxable income by deducting the NOLs in the
CAUTION order in which they were incurred. First, deduct the NOL
from the earliest year, then the NOL from the next earliest year,
etc. After you deduct each NOL, there will be a new, smaller,
modified taxable income to compare to any remaining NOL.

!

Use one pair of columns to enter amounts before and after
carryback for each year to which the loss or credit is being
carried. Start with the earliest carryback year. Use the next pair
of columns for the next consecutive preceding tax year if not fully
absorbed. Enter the date the carryback year ends in the spaces
provided in the column headings at the top of each page.

Line 1—NOL Deduction

For the second preceding tax year, enter on line 1 the amount of
the current year farming loss carried back to the year. For the
first preceding tax year, enter on line 1 the amount from line 10 of
Part II for the second preceding tax year.

Line 2—Taxable Income Before the Current Year
NOL Carryback
Don't take into account on this line any NOL carryback from the
current year or later. However, do take into account NOLs that
occurred in tax years before the current year and are otherwise
allowable as carrybacks or carryforwards.

Enter as a positive number on line 17 any gain you excluded
under section 1202 on the sale or exchange of qualified small
business stock.

Line 17—Section 1202 Exclusion

Note. If your taxable income is shown as zero on your tax return
(or as previously adjusted) for any carryback year, refigure it
without limiting the result to zero and enter it on line 2 as a
negative number.

Lines 19–22—Capital Loss Limitation

Line 3—Net Capital Loss Deduction

The amount deductible for capital losses is limited based on
whether the losses are business capital losses or nonbusiness
capital losses.

Individuals. Enter as a positive number the net long-term
capital loss, if any, shown (or as previously adjusted) on
Schedule D (Form 1040).

You can deduct your nonbusiness capital losses (line 2) only
up to the amount of your nonbusiness capital gains without
regard to any section 1202 exclusion (line 3). If your nonbusiness

Estates and trusts. Enter as a positive number the net
long-term capital loss, if any, shown (or as previously adjusted)
on Schedule D (Form 1041).
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Line 4—Section 1202 Exclusion

Enter as a positive number any gain excluded under section
1202 on the sale or exchange of qualified small business stock.

Line 5—Qualified Business Income Deduction

Enter as a positive number the amount of any qualified business
income (QBI) deduction under section 199A(a) and domestic
production activities deduction allocated from specified
agricultural or horticultural cooperatives under section 199A(g)
claimed on your return for tax years beginning after December
31, 2017. See the Instructions for Form 8995 and Form 8995-A
for guidance on figuring QBI and the deductible amount based
on threshold income levels.

Individuals. Skip this line if, for the applicable carryback year:
• You didn’t itemize deductions; or
• The amounts on lines 3 through 5, are zero.
Otherwise, complete lines 11 through 33 and enter on line 7 the
amount from line 33.
Estates and trusts. Refigure the miscellaneous itemized
deductions shown (or as previously adjusted) on Form 1041 for
the carryback year, and any casualty and theft loss deduction of
property not used in a trade or business or for income-producing
purposes shown (or as previously adjusted) on Form 4684,
Casualties and Thefts, by substituting MAGI (see below) for the
AGI of the estate or trust.
Subtract the refigured deductions and losses from the
deductions and losses previously shown, and enter the
difference on line 7.
Modified AGI for estates and trusts. For purposes of
figuring miscellaneous itemized deductions subject to the 2%
limit, figure MAGI by adding the following amounts to the AGI
previously used to figure these deductions.
• The total of the amounts from lines 3 through 6 of Form 172,
Part II.
• The exemption amount shown (or as previously adjusted) on
Form 1041 for the carryback year.
• The income distribution deduction shown (or as previously
adjusted) on Form 1041 for the carryback year.
For purposes of figuring casualty or theft losses, figure MAGI
by adding the total of the amounts from lines 3 through 6 of Part
II, to the AGI previously used to figure these losses.

TREASURY/IRS
AND OMB USE
ONLY DRAFT
November 26, 2024
Line 6—Adjustment to AGI

If you entered an amount on line 3 or line 4, you must refigure
certain income and deductions based on AGI. These include:
• The special allowance for passive activity losses from rental
real estate activities,
• Taxable social security benefits,
• IRA deductions,
• Excludable savings bond interest,
• The exclusion of amounts received under an employer's
adoption assistance program,
• The student loan interest deduction, and
• The tuition and fees deduction.
For purposes of figuring the adjustment to each of these
items, your AGI is increased by the total of the amounts on line 3
and line 4. Don't take into account any NOL carryback from the
current year or later.
In most cases, figure the adjustment to each item of income
or deduction in the order listed above and, when figuring the
adjustment to each subsequent item, increase or decrease AGI
by the total adjustments you figured for the previous items.
However, a special rule applies if you received social security
benefits and deducted IRA contributions. Use the worksheets in
Pub. 590-A, Contributions to Individual Retirement
Arrangements (IRAs), to refigure your taxable social security
benefits and IRA deductions under the special rule.
Enter on line 6 the total adjustments made to the listed items.
Attach a computation showing how you figured the adjustments.

Line 7—Adjustment to Itemized Deductions

Note. Miscellaneous itemized deductions are suspended for tax
years beginning after 2017 and before 2026. See section 67.
Note. Overall limitation on itemized deductions is suspended for
tax years beginning after 2017 and before 2026. See section 68.

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Line 9—Modified Taxable Income

Combine lines 2 through 8. If zero or less, enter -0-.

Line 10—NOL Carryover to the Subsequent Year
Generally, subtract line 9 from line 1. If zero or less, enter -0-.

After completing all applicable columns, carry forward to the
next year the amount, if any, on line 10 of the column for the first
preceding tax year.
NOLs arising after 2017 and carried forward to a year
after 2020 are subject to the 80%-of-taxable-income
CAUTION limit. The total amount of any NOL deduction for 2021 or
thereafter that is attributable to NOLs from tax years after 2017
can’t exceed 80% of taxable income without regard to the NOL
deduction or sections 199A or 250. Attach a statement to your
tax return showing how you figured the 80% limitation, if
applicable.

!

Line 20—Refigured Mortgage Insurance
Premiums

Mortgage insurance premiums that are paid or accrued before
2022 may be deducted like qualified residence interest. See
section 163. For years prior to 2022, is your MAGI from line 13
more than $100,000 ($50,000 if married filing separately)?

Yes. Your deduction is limited. Refigure your deduction
using the Mortgage Insurance Premiums Deduction Worksheet
next.
No. Your deduction isn't limited. Enter the amount from
line 19 on line 20 and enter -0- on line 21.

Mortgage Insurance Premiums Deduction Worksheet—Line 20

TREASURY/IRS
AND OMB USE
ONLY DRAFT
November 26, 2024
Before you begin:

See the instructions for line 20 to see if you must use this worksheet to refigure your deduction.

1.

Enter the total premiums you paid in the carryback year for mortgage insurance for a contract issued after 2006 . . . . . . . . . . . . 1.

2.

Enter the amount from Form 172, Part II, line 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.

3.

Enter $100,000 ($50,000 if married filing separately) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.

4.

Is the amount on line 2 more than the amount on line 3?
No.

Your deduction isn't limited. Enter the amount from line 19 on line 20 of Form 172, Part II,
and enter -0- on line 21. Don't complete the rest of this worksheet.

Yes.

Subtract line 3 from line 2. If the result isn't a multiple of $1,000 ($500 if married filing
separately), increase it to the next multiple of $1,000 ($500 if married filing separately). For
example, increase $425 to $1,000, increase $2,025 to $3,000; or if married filing
separately, increase $425 to $500, increase $2,025 to $2,500, etc. . . . . . . . . . . . . . . . 4.

5.

Divide line 4 by $10,000 ($5,000 if married filing separately). Enter the result as a decimal. If the result is 1.0 or more, enter
1.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.

6.

Multiply line 1 by line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.

7.

Refigured mortgage insurance premiums deduction. Subtract line 6 from line 1. Enter the result here and on Form 172, Part
II, line 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.

Line 25—Charitable Contributions

States. You are required to give us the information. We need it to
ensure that you are complying with these laws and to allow us to
figure and collect the right amount of tax.

Line 26—Refigured Charitable Contributions

You aren’t required to provide the information requested on a
form that is subject to the Paperwork Reduction Act unless the
form displays a valid OMB control number. Books or records
relating to a form or its instructions must be retained as long as
their contents may become material in the administration of any
Internal Revenue law. Generally, tax returns and return
information are confidential, as stated in section 6103.

Enter your total gifts to charity reported on Schedule A (Form
1040 or Form 1040–NR), or as previously adjusted.

Refigure your charitable contributions using line 24 as your AGI
unless, for any preceding tax year:
• You entered an amount other than zero on line 23; and
• You had any items of income or deductions based on AGI,
which are listed in the instructions for line 6 of Part II.
If you can't use the amount from line 24 as your AGI, figure
your AGI as follows.
1. Figure the adjustment to each item of income or
deduction in the same manner as explained in the instructions
for line 6 of Part II, except don't take into account any NOL
carryback when figuring AGI. Attach a computation showing how
you figured the adjustments.
2. Add lines 3, 4, 5, 11, and 23 of Part II to the total
adjustments you figured in (1) above. Use the result as your AGI
to refigure charitable contributions.
For NOL carryover purposes, you must reduce any charitable
contributions carryover to the extent that the NOL carryover on
line 10 is increased by any adjustment to charitable
contributions.
Paperwork Reduction Act Notice. We ask for the information
on this form to carry out the Internal Revenue laws of the United

The time needed to complete and file this form will vary
depending on individual circumstances. The estimated burden
for individual taxpayers filing this form is approved under OMB
control number XXXX-XXXX and is shown next.
Recordkeeping . . . . . . . . . . . . . . . . .
Learning about the law or the form . . . . .
Preparing the form . . . . . . . . . . . . . . .
Copying, assembling, and sending the form
to the IRS . . . . . . . . . . . . . . . . . . . . .

XX hr., XX min.
XX hr., XX min.
XX hr., XX min.
X hr., XX min.

If you have suggestions for making this form simpler, we
would be happy to hear from you. See the instructions for the tax
return with which this form is filed.

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