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:

Fiscal Year

A 12-month period used for accounting purposes and financial reporting by organizations, which may not align with the calendar year.