Except as otherwise provided in the Internal Revenue Code, gross income includes all income from whatever source derived. Gross income, however, does not include extraterritorial income that is qualifying foreign trade income. Use Form 8873, Extraterritorial Income Exclusion, to figure the exclusion. Include the exclusion in the total for “Other deductions” on line 18.

Also include on line 18 the following:

Disallowance of deduction for employee compensation in excess of $1 million. Publicly held corporations may not deduct compensation to a “covered employee” to the extent that the compensation exceeds $1 million. Generally, a covered employee is:

For this purpose, compensation does not include the following:

The deduction limit does not apply to:

The $1 million limit is reduced by amounts disallowed as excess parachute payments under section 280G.

For details, see section 162(m) and Regulations section 1.162-27.

Limitation on deduction. The total amount claimed may not be more than 10% of LICTI computed without regard to:

Carryover. Charitable contributions over the 10% limitation may not be deducted for the tax year but may be carried over to the next 5 tax years.

A contributions carryover is not allowed, however, to the extent that it increases an operations loss.

Substantiation requirements. Generally, no deduction is allowed for any contribution of $250 or more unless the corporation obtains a written acknowledgment from the donee organization that shows the amount of cash contributed, describes any property contributed, and, either gives a description and a good faith estimate of the value of any goods or services provided in return for the contribution or states that no goods or services were provided in return for the contribution. The acknowledgment must be obtained by the due date (including extensions) of the corporation's return, or, if earlier, the date the return is filed. Do not attach the acknowledgment to the tax return, but keep it with the corporation's records. These rules apply in addition to the filing requirements for Form 8283, Noncash Charitable Contributions, described below.

For more information on substantiation and recordkeeping requirements, see the regulations under section 170 and Pub. 526, Charitable Contributions.

Contributions to organizations conducting lobbying activities. Contributions made to an organization that conducts lobbying activities are not deductible if:

Contributions of property other than cash. If a corporation contributes property other than cash and claims over a $500 deduction for the property, it must attach a schedule to the return describing the kind of property contributed and the method used to determine its fair market value (FMV). Generally, corporations must complete and attach Form 8283 to their returns for contributions of property (other than money) if the total claimed deduction for all property contributed was more than $5,000.

If the corporation made a “qualified conservation contribution” under section 170(h), also include the FMV of the underlying property before and after the donation, as well as the type of legal interest contributed, and describe the conservation purpose benefited by the donation. If a contribution carryover is included, show the amount and how it was determined.

Reduced deduction for contributions of certain property. For a charitable contribution of property, the corporation must reduce the contribution by the sum of:

The reduction for long-term capital gain applies to:

Larger deduction. A larger deduction is allowed for certain contributions of:

Contributions of computer technology and equipment for educational purposes. A corporation may take an increased deduction under section 170(e)(6) for qualified contributions of computer technology or equipment for educational purposes. Computer technology or equipment means computer software, computer or peripheral equipment, and fiber optic cable related to computer use. A contribution is a qualified contribution if:

The term “eligible donee” means:

The following exceptions apply to the above rules for computer technology and equipment:

Line 1, column (a).   Enter dividends (except those received on debt-financed stock acquired after July 18, 1984 (see section 246A)) that:

  Report so-called dividends or earnings received from mutual savings banks, etc., as interest. Do not treat them as dividends.

Line 2, column (a).   Enter on line 2:

Line 3, column (a).   Enter dividends that are:

Line 3, columns (b) and (c).   Dividends received on debt-financed stock acquired after July 18, 1984, are not entitled to the full 70% or 80% dividends-received deduction. The 70% or 80% deduction is reduced by a percentage that is related to the amount of debt incurred to acquire the stock. See section 246A. Also, see section 245(a) before making this computation for an additional limitation that applies to dividends received from foreign corporations. Attach a schedule showing how the amount on line 3, column (c), was figured.

Line 4, column (a).   Enter dividends received on the preferred stock of a less-than-20%-owned public utility that is subject to income tax and is allowed the deduction provided in section 247 for dividends paid.

Line 5, column (a).   Enter dividends received on the preferred stock of a 20%-or-more-owned public utility that is subject to income tax and is allowed the deduction provided in section 247 for dividends paid.

Line 6, column (a).   Enter the U.S.-source portion of dividends that:

  Also include dividends received from a less-than-20%-owned FSC that:

Line 7, column (a).   Enter the U.S.-source portion of dividends received from 20%-or-more-owned foreign corporations that qualify for the 80% deduction under section 245(a). Also include dividends received from a 20%-or-more-owned FSC that:

Line 8, column (a).   Enter dividends received from wholly owned foreign subsidiaries that are eligible for the 100% deduction under section 245(b) but that do not qualify as “100% dividends” under section 805(a)(4)(C).

  In general, the deduction under section 245(b) applies to dividends paid out of the earnings and profits of a foreign corporation for a tax year during which:

  Do not include dividends received from a life insurance company.

  Also, include on line 8, column (a), dividends from FSCs that are attributable to foreign trade income and that are eligible for the 100% deduction provided in section 245(c)(1)(A).

Line 9, column (a).   Enter only those dividends that qualify under section 243(b) for the 100% dividends-received deduction described in section 243(a)(3) but that do not qualify as “100% dividends” under section 805(a)(4)(C). Corporations taking this deduction are subject to the provisions of section 1561. Do not include dividends received from a life insurance company.

  The 100% deduction does not apply to affiliated group members that are joining in the filing of a consolidated return.

Line 10, column (c). Limitation on dividends-received deduction.   Generally, line 10 of column (c), may not exceed the amount from the worksheet below. However, in a year in which a loss from operations occurs, this limitation does not apply even if the loss is created by the dividends-received deduction. (See sections 246(b) and 810.)

Line 13, column (a).   In general, enter “100% dividends” as defined in section 805(a)(4)(C). In other words, in general, enter dividends that qualify for the 100% dividends-received deduction under sections 243, 244 and 245(b) and that are not reported on line 8 or 9 because they were not distributed out of tax-exempt interest or out of dividends that do not qualify as 100% dividends, or because they were paid by a life insurance company.

Line 14, column (a).   Include the following:

Line 1. Interest.   Enter the total taxable interest received or accrued during the tax year, less any amortization of premium, plus any accrual of discount required by section 811(b). Generally, the appropriate amortization of premium and accrual of discount for the tax year on bonds, notes, debentures, or other evidence of indebtedness held by a life insurance company should be determined:

   For bonds (as defined in section 171(d)) issued after September 27, 1985, the appropriate amount of amortization of premium must be determined using the yield to maturity method described in section 171(b)(3). Market discount is not required to be accrued under section 811(b). Attach a statement showing the method and computation used.

Line 3. Gross rents.   Enter the gross rents received or accrued during the tax year. Related expenses, such as repairs, taxes, and depreciation should be reported as “Other deductions” on line 18, page 1.

Line 4. Gross royalties.   Enter the gross royalties received or accrued during the tax year. Report the depletion deduction on line 18, page 1.

Line 5. Leases, terminations, etc.   Enter the gross income received from entering into, altering, or terminating any lease, mortgage, or other instrument from which the corporation derives interest, rents, or royalties.

Line 6. Excess of net short-term capital gain over net long-term capital loss.   See the instructions for line 5, page 1, on page 7, for a definition of capital assets.

Line 7. Gross income from a trade or business other than insurance.   Enter the gross income from a trade or business (other than insurance carried on by the life insurance company or by a partnership of which the life insurance company is a partner). Include section 1245, section 1250, and other ordinary gains on assets used in a noninsurance business from Form 4797. Report expenses related to any trade or business other than insurance on line 18, page 1.

Line 10. The increase in policy cash value of section 264(f) policies as defined in section 805(a)(4)(F).   Generally, this applies to contracts issued after June 8, 1997, in tax years ending after that date. However, it also applies to contracts issued prior to June 9, 1997, that have been subject to a material increase in death benefits or other material change. See section 1084(d) of the Taxpayer Relief Act of 1997.

Line 12. 100% qualifying dividends.   Enter the total amount of dividends if the percentage used to determine the deduction allowable under sections 243, 244, and 245(b) is 100%. Do not include dividends to the extent they are funded with tax-exempt interest or dividends that would not qualify as 100% dividends in the hands of the corporation. See section 812(e).

Line 1. Life insurance reserves.   For rules on how to compute life insurance reserves, see sections 807(d) and (e). Section 807(d)(2)(B) provides that the interest rate used to compute life insurance reserves is the greater of the applicable Federal interest rate (AFIR) or the prevailing State assumed interest rate (SAIR). The applicable rates for tax years beginning in 2003 will be published in the Internal Revenue Bulletin when available. The applicable rates for tax years beginning in 2002 are available at Rev. Rul. 2003-24, 2003-10 I.R.B. 557. For modified guaranteed contracts described in section 817A, see Notice 97-32, 1997-1 C.B. 420.

Line 2. Unearned premiums and unpaid losses.   For purposes of sections 807 and 805(a)(1), the amount of the unpaid losses (other than losses on life insurance contracts) must be the amount of the discounted unpaid losses determined under section 846.

  Section 846 provides that the amount of the discounted unpaid losses must be computed separately by each line of business (multiple peril lines must be treated as a single line of business) and by each accident year and must be equal to the present value of those losses determined by using the:

  Special rules apply with respect to unpaid losses related to disability insurance (other than credit disability insurance), noncancelable accident and health insurance, cancelable accident and health insurance, and to the international and reinsurance lines of business. With regard to the special rules for discounting unpaid losses on accident and health insurance (other than disability income insurance), unpaid losses are assumed to be paid in the middle of the year following the accident year.

  Generally, the amount of undiscounted unpaid losses means the unpaid losses shown in the annual statement. The amount of discounted unpaid losses with respect to any line of business for an accident year cannot exceed the total amount of unpaid losses with respect to any line of business for an accident year as reported on the annual statement.

  The applicable interest rate for each calendar year and the applicable loss payment patterns for each accident year for each line of business are determined by the IRS. The applicable interest rate and loss payment patterns for 2003 will be published in the Internal Revenue Bulletin when available. The applicable interest rate and loss payment patterns for 2001 and 2002 are published in Rev. Proc. 2001-60, 2001-53 I.R.B. 643, and Rev. Proc. 2003-17, 2003-6 I.R.B. 427, respectively.

  Corporations having sufficient historical experience to determine a loss payment pattern may, under certain circumstances, elect under section 846(e) to use their own historical experience (instead of the loss payment patterns determined by the IRS). If this election is made, the loss payment patterns will be based on the most recent calendar year for which an annual statement was filed before the beginning of the accident year. The election will not apply to any international or reinsurance line of business. If the corporation makes this election, check the “Yes” column for question 9 in Schedule M, Other Information. For more information, see section 846(e), Regulations section 1.846-2, and Rev. Proc. 92-76, 1992-2 C.B. 453.

  Section 807(d)(4)(A)(ii) permits an election to recompute the Federal interest rate every 5 years. In general, a life insurance company would apply the greater of the AFIR or the prevailing SAIR for the calendar year in which the contract is issued and the following 4 calendar years. In the 5th calendar year after the calendar year in which the contract was issued, the life insurance company would begin using the AFIR in effect for that 5th calendar year or the prevailing SAIR for the calendar year in which the contract was issued, whichever is greater. This rate would then remain in effect for the 4 subsequent years. For each subsequent 5-year period, a similar recomputation would be required. Once made, the election is effective for contracts issued during that calendar year and any subsequent years, and may only be revoked with the consent of the IRS.

Line 3. Supplementary contracts.   Enter the amount (discounted at the appropriate rate of interest) necessary to satisfy the obligations under insurance and annuity contracts, but only if the obligations do not involve (at the time the computation is made) life, accident, or health contingencies.

  For this item, the appropriate rate of interest is the higher of the prevailing SAIR at the time the obligation first did not involve life, accident, or health contingencies or the rate of interest assumed by the corporation (at that time) in determining the guaranteed benefit. However, the amount of any contract may not be less than the net surrender value of the contract.

Line 4. Dividend accumulations and other amounts.   Enter the total dividend accumulations and other amounts held at interest in connection with insurance and annuity contracts.

Line 5. Advance premiums.   Enter the total premiums received in advance and liabilities for premium deposit funds. See section 807(e)(7)(A) for special rules for treatment of certain nonlife reserves.

Line 6. Special contingency reserves.   Enter the total reasonable special contingency reserves under contracts of group term life insurance or group accident and health insurance which are established and maintained for the provision of insurance on retired lives, premium stabilization, or for a combination thereof.

Line 8. Increase (decrease) in reserves.   In figuring the amount on line 8, any decrease in reserves must be computed without any reduction of the closing balance of section 807 reserves by the policyholders' share of tax-exempt interest.

Lines 9 and 12.   Do not include any of the interest income received on an ESOP loan made prior to August 21, 1996. For binding contract and refinancing rules, see section 1602 of the Small Business Job Protection Act of 1996.

Line 12.   If there is an increase in reserves, enter the amount from page 1, line 8. If there is a decrease in reserves, see the instructions for line 2, page 1.

Line 13.   Do not include the exempt portion of any of the interest income received on an ESOP loan made prior to August 21,1996. For binding contract and refinancing rules, see section 1602 of the Small Business Job Protection Act of 1996.

Line 16.   In computing the amount entered on line 16, any decrease in reserves must be figured without any reduction of the closing balance of section 807 reserve items by the policyholders' share of tax-exempt interest.

Line 18a.   A policyholder dividend is any dividend or similar distribution to policyholders in their capacity as such.

  Enter on line 18a policyholder dividends paid or credited (including an increase in benefits) where the amount is not fixed in the contract but depends on the corporation's experience or management's discretion.

  Also, under section 808(e), any policyholder dividend which (a) increases either the cash surrender value of the contract or other benefits payable under the contract or (b) reduces the premium otherwise required to be paid, is treated as paid to and returned by the policyholder to the company as a premium. Include these amounts in income on line 1, page 1.

Line 18b.   Excess interest means any amount in the nature of interest:

Line 18c.   Premium adjustment means any reduction in the premium under an insurance or annuity contract which (except for the reduction) would have been required to be paid under the contract.

Line 18d.   Experience-rated refund means any refund or credit based on the experience of the contract or group involved.

Line 28.   Multiply gross investment income (line 9) by 90% or, in the case of gross investment income related to assets held in segregated asset accounts under variable contracts, by 95%. Enter the result on line 28.

Line 1. Gross premiums and other consideration.   Generally, gross premiums and other consideration is the total of:

  Also include on this line:

Line 2. Return premiums and premiums and other consideration incurred for reinsurance.   For purposes of section 848(d)(1)(B) and Regulations section 1.848-2(e), return premiums means amounts (other than policyholder dividends or claims and benefit payments) returned or credited to the policyholder. See Regulations sections 1.848-2(f) and 1.848-3 for how to treat amounts returned to another insurance company under a reinsurance agreement.

Line 5.   The entries in columns 5(a), (b), or (c) may be positive or negative.

Line 6.   If the sum of columns 5(a), (b), and (c) is negative, enter this negative amount on line 6 and enter -0- on lines 7 and 8. The result is a negative capitalization amount under section 848(f).

Line 9. General deductions.   These are deductions under sections 161 through 198, relating to itemized deductions, and sections 401 through 424, relating to pension, profit-sharing, stock bonus plans, etc. Also, include on this line ceding commissions incurred for the reinsurance of a specified insurance contract. Do not include amortization deductions of specified policy acquisition expenses under sections 848(a) or (b). Skip line 9 if the corporation has elected out of the general deductions limitation. See Regulations section 1.848-2(g)(8).

Line 13. Unamortized specified policy acquisition expenses from prior years.   Enter the balance of unamortized specified policy acquisition expenses from prior years as of the beginning of the tax year. See section 848(f)(1)(B).

Line 16. Phase-out amount.   The amount of amortization for members of a controlled group and the phase-out of the group's specified policy acquisition expenses under section 848(b) must be allocated to each member in proportion to that member's specified policy acquisition expenses for the tax year.

Line 2d.   Do not include the increase in cash value for section 264(f) policies.

Line 4.   In figuring the tax liability on line 4, adjustments must be made for any year in which the alternative minimum tax is imposed or the minimum tax credit has been taken.

Line 6.   Enter all amounts treated under section 815 as distributions to shareholders. Any distribution to shareholders is treated as having been made first out of the SSA, to the extent thereof.

Line 8.   If the balance at the end of the preceding tax year differs from the balance at the beginning of the current tax year (for example, due to section 815(d)(5) as in effect prior to the Act of 1984), attach a schedule showing the adjustments made. Prior to the Act of 1984, section 815(d)(5) provided that, if any addition to the PSA increases or creates a loss from operations and part or all of the loss cannot be used in any other year to reduce LICTI, then the loss will reduce the PSA at the time that the addition was made. In this case, the beginning balance of the PSA must be adjusted before any subtractions for the current tax year are made.

Line 9b.   To figure the tax increase due to the amount entered on line 9a:

Line 9c.   To figure the amount to enter on line 9c:

Line 9d.   Subtract the result of step 3, line 9c, from the result of step 1, line 9c. Enter the result on line 9d.

Line 9e.   Enter the total amount to be subtracted from the PSA under section 815(d)(2) as in effect prior to the Act of 1984. At that time, section 815(d)(2) provided that if, for any tax year, a corporation was not an insurance company, or if for any 2 successive tax years a corporation was not a life insurance company, then any balance remaining in the PSA at the end of the last tax year that the corporation was a life insurance company must be included in taxable income for that tax year.

Line 1. Members of a controlled group.    A member of a controlled group, as defined in section 1563, must check the box on line 1 and complete lines 2a and 2b.

Line 2a.   Members of a controlled group are entitled to one $50,000, one $25,000, and one $9,925,000 taxable income bracket amount (in that order) on line 2a.

  When a controlled group adopts or later amends an apportionment plan, each member must attach to its tax return a copy of its consent to this plan. The copy (or an attached statement) must show the part of the amount in each taxable income bracket apportioned to that member. See Regulations section 1.1561-3(b) for other requirements and for the time and manner of making the consent.

Line 2b.   Members of a controlled group are treated as one group to figure the applicability of the additional 5% tax and the additional 3% tax. If an additional tax applies, each member will pay that tax based on the part of the amount used in each taxable income bracket to reduce that member's tax. See section 1561(a). If an additional tax applies, attach a schedule showing the taxable income of the entire group and how the corporation figured its share of the additional tax.

Line 3.   Most corporations figure their tax by using the Tax Rate Schedule. Exceptions apply to members of a controlled group. See the Tax Computation Worksheet for Members of a Controlled Group on this page. Members of a controlled group must attach a statement showing the computation of the tax entered on line 3.

Line 4. Alternative minimum tax (AMT).    Unless the corporation is treated as a small corporation exempt from the AMT, it may owe the AMT if it has any of the adjustments and tax preference items listed on Form 4626. A life insurance company must file Form 4626 if its LICTI before the operations loss deduction, combined with these adjustments and tax preference items, is more than the smaller of $40,000 or the life insurance company's allowable exemption amount (from Form 4626).

  See Form 4626 and its instructions for details.

Exemption for small corporation.    A corporation is treated as a small corporation exempt from the AMT for its tax year beginning in 2003 if that year is the corporation's first tax year in existence (regardless of its gross receipts) or:

Line 6a. Foreign tax credit.   To find out when a corporation can take this credit for payment of income tax to a foreign country or U.S. possession, see Form 1118, Foreign Tax Credit—Corporations.

Line 6b. Other credits.   Include any other credits on line 6b. On the dotted line to the left of the entry space, write the amount of the credit and identify it.

Line 6c. General Business Credit.   Enter on line 6c the corporation's total general business credit.

  If the corporation is filing Form 8844, Empowerment Zone and Renewal Community Employment Credit, or Form 8884, New York Liberty Zone Business Employee Credit, check the “Form(s)” box, write the form number in the space provided, and include the allowable credit on line 6c.

  If the corporation is required to file Form 3800, General Business Credit, check the “Form 3800” box and include the allowable credit on line 6c.

  If the corporation is not required to file Form 3800, check the “Form(s)” box, write the form number in the space provided, and include on line 6c the allowable credit from the applicable form listed below.

  

Line 6d. Credit for prior year minimum tax.   To figure the minimum tax credit and any carryforward of that credit, use Form 8827, Credit for Prior Year Minimum Tax—Corporations. Also see Form 8827 if any of the corporation's 2002 nonconventional source fuel credit or qualified electric vehicle credit was disallowed solely because of the tentative minimum tax limitation. See section 53(d).

Line 6e. Qualified zone academy bond credit.   Enter the amount of any credit from Form 8860, Qualified Zone Academy Bond Credit.

Line 9. Foreign Corporations.   A foreign corporation carrying on a life insurance business in the United States is taxed as a domestic life insurance company on its income effectively connected with the conduct of a trade or business in the United States (see sections 864(c) and 897 for definition).

  Generally, any other U.S.-source income received by the foreign corporation is taxed at 30% (or at a lower treaty rate) under section 881. If the corporation has this income, attach a schedule showing the kind and amount of income, the tax rate, and the amount of tax. Enter the tax on line 9. However, see Reduction of section 881 tax below.

Line 10. Other Taxes.   Include any of the following taxes and interest in the total on line 10. Check the appropriate box(es) for the form, if any, used to compute the total.

Line 11. Total Tax.   Include any deferred tax on the termination of a section 1294 election applicable to shareholders in a qualified electing fund in the amount entered on line 11. See Form 8621, Part V, and How to report below.

  Subtract any deferred tax on the corporation's share of undistributed earnings of a qualified electing fund (see Form 8621, Part II).

For Schedule L, assets means all assets of the corporation. In valuing real property and stocks, use fair market value; for other assets, use the adjusted basis as determined under section 1011 and related sections, without regard to section 818(c). An interest in a partnership or trust is not itself treated as an asset of the corporation. Instead, the corporation is treated as actually owning its proportionate share of the assets held by the partnership or trust. The value of the corporation's share of these assets should be listed on line 3.

Foreign life insurance companies must maintain a minimum surplus of U.S. assets over their U.S. insurance liabilities. The minimum required surplus is determined by multiplying their U.S. insurance liabilities by a percentage determined by the IRS. The IRS determines the percentage from data supplied by domestic life insurance companies in Schedule L, Part II. See section 842.

For Schedule L, total insurance liabilities means the sum of the following amounts as of the end of the tax year:

1. Total reserves as defined in section 816(c); plus

2. The items referred to in paragraphs (3), (4), (5), and (6) of section 807(c), to the extent such amounts are not included in total reserves.

Foreign life insurance companies, see Notice 89-96 for more information on determining total insurance liabilities on U.S. business.

Question 6.   Check the “Yes” box if:

  Any corporation that meets either of the requirements above should check the “Yes” box. This applies even if the corporation is a subsidiary member of one group and the parent corporation of another.

Affiliated group.   The term “affiliated group” means one or more chains of includible corporations (section 1504(a)) connected through stock ownership with a common parent corporation. The common parent must be an includible corporation and the following requirements must be met.

  For this purpose, “stock” generally does not include any stock that (a) is nonvoting, (b) is nonconvertible, (c) is limited and preferred as to dividends and does not participate significantly in corporate growth, and (d) has redemption and liquidation rights that do not exceed the issue price of the stock (except for a reasonable redemption or liquidation premium). See section 1504(a)(4).

Parent-subsidiary controlled group.   The term “parent-subsidiary controlled group” means one or more chains of corporations connected through stock ownership (section 1563(a)(1)). Both of the following requirements must be met.

  See section 1563(d)(1) for the definition of “stock” for purposes of determining stock ownership above.

Question 8.   Check the “Yes” box if one foreign person owned at least 25% of (a) the total voting power of all classes of stock of the corporation entitled to vote or (b) the total value of all classes of stock of the corporation.

  The constructive ownership rules of section 318 apply in determining if a corporation is foreign owned. See section 6038A(c)(5) and the related regulations.

  Enter on line 8a the percentage owned by the foreign person specified in question 8. On line 8b, write the name of the owner's country.

Foreign person.   The term “foreign person” means:

Owner's country.   For individuals, the term “owner's country” means the country of residence. For all others, it is the country where incorporated, organized, created, or administered.

Requirement to file Form 5472.   If the corporation checked “Yes” to Question 8, it may have to file Form 5472. Generally, a 25% foreign-owned corporation that had a reportable transaction with a foreign or domestic related party during the tax year must file Form 5472.

  See Form 5472 for filing instructions and penalties for failure to file.

Item 12.   If the corporation has an operations loss deduction (OLD), it may elect under section 810(b)(3) to waive the entire carryback period for the OLD and instead carry the OLD forward to future tax years. To do so, check the box on line 12 and file the tax return by its due date, including extensions (do not attach the statement described in Temporary Regulations section 301.9100-12T). Once made, the election is irrevocable. See Pub. 542, section 810, and Form 1139 for more details.

  Corporations filing a consolidated return must also attach the statement required by Temporary Regulations section 1.1502-21T(b)(3)(i) or (ii).

Item 13.   Enter the amount of the operations loss carryover to the tax year from prior years, even if some of the loss is used to offset income on this return. The amount to enter is the total of all operating losses generated in prior years but not used to offset income (either as a carryback or carryover) in a tax year prior to 2003. Do not reduce the amount by any OLD reported on line 20, page 1.