DH has a substantial NOL (1231 step-up loss, Net Operating Loss) that can be deducted from ordinary income. However, the tax program showed the AMT (Alternative Minimum Tax) where the NOL is added back into income, resulting in a much higher tax.

What is the point of allowing the NOL deduction if the AMT disallows it? Is there any way for us to benefit from the NOL?

You probably need to calculate the amount of the NOL for AMT purposes. How to do that depends on the source of the loss.

If it is a pass through on some kind of K-1 (from a trust or estate if memory serves me) take a close look to see if there is an adjustment to the loss in box 12 of that K-1. (It will be a different box number if it’s not from a trust or estate.)

If the loss is from your prior year return (that would be your 2020 return), then it’s a matter of getting the loss carryover from the previous year correct. That can be a whole mess, but look in the details of your 2020 return for a form 6251 that is marked “for AMT purposes” or look for a worksheet that does the same calculations.

And there are a couple of other places the loss could come from. But the bottom line is that an NOL is allowed for AMT purposes, but the amount may differ from the regular tax NOL.