Patrick Has a Business Net Operating Loss of $70,000 in 2015

question 46

Multiple Choice

Patrick has a business net operating loss of $70,000 in 2015. Patrick's business generated significant taxable profits in 2013 and in 2014. Which of the following is true? ​

• A)Patrick may offset income he generated in 2013 and 2014 with 2015's net operating loss by carrying the net operating loss back to each of those tax years.The remaining net operating loss (if any) can be carried forward and used to offset future taxable income.
• B)Patrick may use the net operating loss to offset income from any year he chooses.
• C)Net operating losses can offset only future income.
• D)Patrick may elect to offset the income he generated in 2014 with 2015's net operating loss.The remaining net operating loss (if any) can be used to offset future taxable income.
• E)None of the above.

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Definitions:

Unanimous Consent

Agreement by all parties or members involved, often used to expedite procedural or formal requirements without formal vote.

Partners

Individuals or entities that share ownership and responsibilities in a business or venture.

Regulatory Control

The oversight and enforcement of rules and regulations by a governing body to ensure adherence to lawful standards and protect public interests.

Sole Proprietor

The single owner of an unincorporated business, personally responsible for all debts and obligations of the business.