Scenario 7

When the NOL Allowance Rate is set to 100% and the Base NOL Allowance is set to 0, the NOL Reclass is the product of the NOL Beginning Balance (500,000) and the NOL Allowance Rate (100%).

500,000 <NOL Beginning Bal> * 100% <NOL allowance rate>= -(500,000)<NOL Reclass>

Note: The NOL Reclass takes the total NOL Beginning Balance because 100% of Federal Taxable Income (Pre-NOL) is greater than the available NOL Deferred Tax Asset.

If the NOL Reclass is added to the Federal Taxable Income (Pre-NOL), the Federal Taxable Income (Post-NOL) is 0.

2,048,000 <TI Pre-NOL> + -500,000<NOL reclass> = 1,548,000 <TI Post-NOL>

NOL Ending Balance

(Beginning Bal + Deferred Only + Balance Sheet Only) + (NOL Reclass) = NOL End Bal

(500,000 <BBal> + 0<DO> + 600,000 <Bal O>) + (-500,000 <NOL Reclass>)  = 600,000 <EB>

Note: To access the report, select the Reporting area, Dataset, and Report Level.  Then, in the navigator select Tax Provision and click Run.  View Detail.  On the report, select the View Detail hyperlink.