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Per Regulation 1.170A-11(c)(2) and Revenue Ruling 76-145, UltraTax CS will reclass disallowed charitable contributions to an NOL. A reclassification will occur if current year contributions and/or contribution carryovers are disallowed and if the NOL carryover is not fully absorbed by the taxable income minus the charitable contribution deduction calculated without regard to the NOL carryover.

UltraTax CS Example:

Taxable Income = $101,000 Charitable Contribution = $20,000 NOL Carryover = $98,000

1. Figure the charitable contribution deduction limit (10% of taxable income before contribution deduction).

   Taxable Income ($101,000) * 10% = Charitable Contribution Deduction ($10,100)

2. Figure the difference between the actual contribution and the amount allowed (if no NOL carryover existed) to determine the charitable contribution carryover.

   Actual Contribution ($20,000) - Contribution Deduction Limit ($10,100) = Contribution Carryover ($9,900)

3. Next, figure the available income.

   Taxable Income ($101,000) - Available NOL ($98,000) = Available Income ($3,000)

4. Figure the charitable contribution deduction, which is 10% of available income ($3,000 * 10%) = $300
5. Lastly, subtract the contribution deduction from charitable contributions allowed to determine the amount to be reclassified as an NOL.

Charitable Contribution ($10,100) - Contribution Deduction ($300) = Contribution Reclassified ($9,800)

UltraTax CS will print the reclassed contribution on the Charitable Contribution Carryover Worksheet, located in Forms View in the CharCont folder.

Note: UltraTax CS does not produce a worksheet outlining the above calculation

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