1

NOL and Carrovers in the Discharge Year

The amount of net operating loss and carryovers in the discharge year is reduced first. The amount of reduction shall be $1.00 for each $1.00 of COD income excluded from gross income.

2

General Business Credit

The amounts used to determine the allowable general business credit in the discharge year is second. The amount of reduction shall be $0.333 for each $1.00 of COD income excluded from gross income.

3

Minimum Tax Credit

The amount of the minimum tax credit available at the beginning of the year following the discharge is third. The amount of reduction shall be $0.333 for each $1.00 of COD income excluded from gross income.

4

Net Capital Losses and Carryovers

Any net capital loss and carryover for the discharge year is fourth. The amount of reduction shall be $1.00 for each $1.00 of COD income excluded from gross income.

5

Basis of Taxpayer Property

The basis of the taxpayer's property is fifth. The amount of reduction shall be $1.00 for each $1.00 of COD income excluded from gross income.

6

Passive Activity Loss or Credit Carryover

The amount of passive activity loss or credit carryover for the discharge yeasr is sixth.

7

Foreign Tax Credit

The amounts used to determine the allowable amount for foreign tax credit in the discharger year is seventh. The amount of reduction shall be $0.333 for each $1.00 of COD income excluded from gross income.

8

ELECTION TO REDUCE THE BASIS OF DEPRECIABLE PROPERTY

The taxpayer can elect to reduce the basis of depreciable property before the items listed above to the extent of the aggregate adjusted bases of depreciable property