Where are you finding that the NOL can't be applied to the joint income?  That might be correct, but all the examples I find involve situations where the couple was married in both the loss year and the carryover year -- just not filing jointly each year.  Or, after a divorce the spouse with a loss wants to carryback to a joint-return year.  There's no rule requiring one spouse's itemized deductions to be limited to that spouse's income, so is it different for NOL's?  (And I hate to ask, if this happened in a community-property state.)