Two's Compliment method of Subtraction for Binary Numbers:

1. Take the two's compliment of the negative number. (How to form the twos compliment.)  If necessary add leading zeros to the MSB of the negative number so that it is the same number of bits as the positive number.
2.  Add the two's compliment just found to the positive number using binary addition.
3. a) If there is a carry out of the MSB:
      Discard the carry.  The result is the answer in binary.
   b) If there is no carry out of the MSB:
   The answer is negative and the value of the answer in two's compliment form.  Convert the answer by taking its two's compliment and indicate that it is negative.
   

Note: How to form the two's compliment of a binary number:

1. Compliment (take the opposite value) of each bit in the number.
2. Use binary addition to add one to this new number.
3. To get any number OUT of two's compliment form, just two's compliment it again.