NOL-F85: Computation of Net Operating Loss – Fiduciary Return (Form 41) (2025)
Alabama · Alabama DOR · Used for tax years 2025
Alabama Form NOL-F85 computes an estate or trust's allowable net operating loss for Form 41 and determines the amount that can be carried back or forward to another tax year. It also includes an election to forfeit the carryback and carry the loss forward only.
Who files this form
Form NOL-F85 is used to calculate a net operating loss for an estate or trust filing Alabama Form 41 and determine the amount that can be carried back or forward to another tax year.
If the result on Part II, line 17 is zero or positive, the form says to stop and not file it because there is no allowable net operating loss.
What you'll need
Have these forms and details available to complete NOL-F85:
- Alabama Form 41, including the estate or trust name, income amounts, and fiduciary exemption.
- Schedule ESBT, if applicable. The form specifically references Schedule ESBT, line 20, for the ESBT NOL calculation.
- The federal employer identification number and loss year ending date.
- Nonbusiness deductions claimed on Form 41 or Schedule ESBT, including interest paid, taxes paid, losses on sales of nonbusiness assets, and other nonbusiness deductions.
- Nonbusiness income reported on Form 41 or Schedule ESBT, including dividends, interest, federal income tax refunds, estate or trust income, gains on sales of nonbusiness assets, and other nonbusiness income.
Common mistakes
- Completing Part III when carrying the loss back. The form cautions not to complete Part III if you are carrying the loss back.
- Including the income distribution deduction in the line 13 calculation. The form says this calculation cannot include the deduction from Form 41, page 1, line 2.
- Filing when line 17 is zero or positive. The form says to stop and not file because there is no allowable net operating loss.
- Entering the loss on line 3a as a negative amount. The form directs you to enter a loss on the sale of nonbusiness assets as a positive amount.
Questions people ask
What does Form NOL-F85 calculate?
It calculates the net operating loss originating in a tax year and determines how much can be carried back or forward to another tax year.
What happens if line 17 is negative?
A negative result is the allowable net operating loss. You may elect to carry it forward. Otherwise, the form says it must be carried back two years, and any unused portion may then be carried forward to succeeding years.
How do I choose to carry the loss forward instead of back?
Check the box in Part III to elect to forfeit the carryback provision and carry forward any allowable net operating loss for the taxable year. Do not complete Part III if you are carrying the loss back.
What do I enter if nonbusiness income exceeds nonbusiness deductions?
If Part I, line 11 exceeds line 4, enter zero on line 12 and on Part II, line 15.