### Question
How does the law define alternative tax net operating loss deduction?


### Answer
Under *26 U.S.C. § 56*, **alternative tax net operating loss deduction** is defined as:

> the net operating loss deduction allowable for the taxable year under section 172, except that—


(A) the amount of such deduction shall not exceed the sum of—


(i) the lesser of—


(I) the amount of such deduction attributable to net operating losses (other than the deduction described in clause (ii)(I)), or


(II) 90 percent of alternative minimum taxable income determined without regard to such deduction and the deduction under section 199, plus


  

(ii) the lesser of—


(I) the amount of such deduction attributable to an applicable net operating loss with respect to which an election is made under section 172(b)(1)(H), or


(II) alternative minimum taxable income determined without regard to such deduction and the deduction under section 199 reduced by the amount determined under clause (i), and


  

(B) in determining the amount of such deduction—


(i) the net operating loss (within the meaning of section 172(c)) for any loss year shall be adjusted as provided in paragraph (2), and


(ii) appropriate adjustments in the application of section 172(b)(2) shall be made to take into account the limitation of subparagraph (A)

#### Citation:
  - *26 U.S.C. § 56*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter A-Determination of Tax Liability > PART VI-ALTERNATIVE MINIMUM TAX**

