A Net Operating Loss (NOL)occurs When Taxable Income for Any

question 12

True/False

A net operating loss (NOL)occurs when taxable income for any year is negative because itemized deductions and total exemptions exceed business income.

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Definitions:

Proprietorship

A business structure owned by a single individual who is responsible for its liabilities and entitled to its profits.

Taxed

The imposition of a financial charge or other levy upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Double Taxation

A taxation principle referring to income taxes that are paid twice on the same source of income, common in C-type corporations where income is taxed at both the corporate and shareholder levels.

Corporate

Relating to a large company or group of companies authorized to act as a single entity.