A Taxpayer Incurs a Net Operating Loss in the Current

question 45

Multiple Choice

A taxpayer incurs a net operating loss in the current year.With respect to the application of the NOL

• A)the taxpayer will carry back the NOL three years first,then carry forward any balance for five years.
• B)the taxpayer must carry forward the loss and has up to 20 years to use it.
• C)the taxpayer can carry forward the loss indefinitely until there is sufficient taxable income to use it up.
• D)the taxpayer will first carry back the NOL for two years,then carry forward the balance for a period of 20 years,or the taxpayer can elect to only carry forward the loss for the 20-year allowable period.

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Definitions:

Total Assets

The sum of all assets owned by an entity at a given point, including current and non-current assets.

Long-Term Debt

Refers to loans or other forms of financial obligation that are due for repayment more than one year into the future.

Shares of Stock

Shares of stock represent units of ownership in a company or financial asset, providing the shareholder with a proportionate part of the company's profits and assets.