IRS Publication 536 - Net Operating Losses For Individuals, Estates, And Trusts

DEFINITION of 'IRS Publication 536 - Net Operating Losses For Individuals, Estates, And Trusts'

A document published by the Internal Revenue Service (IRS) that provides guidance to individuals who have more deductions than income in a given tax year. If the total deductions a taxpayer claims are greater than that taxpayer's income for the year, the taxpayer is said to have a net operating loss (NOL). The NOL loss is typically caused by deductions related to business expenses, casualty or theft, moving expenses, rental property expenses or expenses related to being an employee.

BREAKING DOWN 'IRS Publication 536 - Net Operating Losses For Individuals, Estates, And Trusts'

To determine if there is a NOL, individual taxpayers should first complete their tax return. A negative number appearing in line 41 (in form 1040) or line 38 (in form 1040NR) may mean that there is a NOL. Taxpayers then must determine if the NOL is carryfoward, carryback or is to be used in the current tax year.


IRS Publication 536 does not cover bankruptcies or losses incurred by partnerships or S Corporations, though individual partners or S corporation shareholders can use the income or deductions from their personal shares in order to calculate their individual NOL.

RELATED TERMS
  1. Net Operating Loss - NOL

    A period in which a company's allowable tax deductions are greater ...
  2. Form 1045: Application For Tentative ...

    A tax form distributed by the Internal Revenue Service (IRS) ...
  3. Schedule A

    Schedule A is a U.S. income tax form that is used by taxpayers ...
  4. Standard Deduction

    A base amount of income that is not subject to tax and that can ...
  5. Tax Deduction

    A deduction from gross income that arises due to various types ...
  6. Form 3903

    A tax form distributed by the Internal Revenue Service (IRS) ...
Related Articles
  1. Investing

    Understanding Net Operating Loss

    Net operating loss is a term from the Internal Revenue Code that refers to a tax situation where tax deductions exceed income.
  2. Personal Finance

    An Overview Of Itemized Deductions

    Not taking the standard deduction this year could save you hundreds of dollars.
  3. Financial Advisor

    Increase Your Tax Refund With Above-The-Line Deductions

    Find out about these deductions and how you can use them to lower your tax bill.
  4. Personal Finance

    New Tax Rules Target The Top Tax Bracket

    The American Taxpayer Relief Act brings about new tax rules for the wealthy that people such as Warren Buffett have been calling for over the last few years.
  5. Personal Finance

    Deducting Disaster: Casualty And Theft Losses

    If you've been a victim, your losses may be deductible. Find out how.
  6. Personal Finance

    What's IRS Form 1040 For?

    Most U.S. taxpayers will be familiar with the 1040. By the end of filling it out, you'll know how much tax you owe, or what your refund is.
  7. Personal Finance

    Calculating the Mortgage Interest Tax Deduction

    The amount of money you save by paying your mortgage off quickly will far exceed any benefit from the mortgage interest tax deduction.
  8. Personal Finance

    Start Over With The IRS

    If you're struggling to pay back taxes, try a fresh start with the IRS. They really can help.
  9. Personal Finance

    IRS Asset Seizures: Could It Happen To You?

    If you can't pay your taxes, know that the IRS has many avenues for collecting what you owe.
  10. Personal Finance

    Form 9465: Don't Pay Your Back Taxes Without It

    This form can lighten your tax load if you owe Uncle Sam.
RELATED FAQS
  1. How do I know whether to itemize deductions or take the standard deduction?

    Taking the standard deduction is the easiest and most common method chosen by filers, but many taxpayers may wind up paying ... Read Answer >>
  2. What’s the difference between IRS Forms 1040 and 1040EZ?

    Though very similar, the differences between the 1040 and 1040EZ Forms are significant when it comes to filing your tax return. ... Read Answer >>
  3. Are IRS penalties tax deductible?

    Learn about penalties assessed by the U.S. Internal Revenue Service and how the IRS does not taxpayers to deduct them on ... Read Answer >>
  4. How is the deductible I paid for my insurance claim treated for tax purposes?

    Find out how your health insurance deductible is treated for tax purposes and under what conditions you may be able to deduct ... Read Answer >>
  5. Are estate planning fees tax deductible?

    The costs of estate planning can be significant. Are any of these expenses deductible to the taxpayer or are they merely ... Read Answer >>
  6. What are the deductions taken to determine AGI (adjusted gross income)?

    Read more about the deductions taken to arrive at adjusted gross income, or AGI, including the differences between above ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center