When the Holloway Trust Terminated This Year, It Held a $1

question 62

Essay

When the Holloway Trust terminated this year, it held a $1 million NOL carryforward. How is the loss carryforward treated? Does it expire with the trust or can another taxpayer use it? Be specific.

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Definitions:

Net Sales

The net income generated from sales after deducting returns, allowances, and discounts.

Total Assets

The combined value of all owned resources and property by an entity that has economic value.

Salvage Value

An asset’s projected terminal value after the end of its usefulness.

Straight-line Method

A method of depreciation that allocates an equal amount of the asset's cost to each year of its useful life.