A Corporation Generates a Net Operating Loss in 2018

question 1244

Multiple Choice

A corporation generates a net operating loss in 2018. Which of the following statements is correct regarding the corporation's ability to deduct the NOL?

• A) The NOL can only be carried forward, but the carryover period is unlimited.
• B) The NOL can be carried back three years and carried forward five years, with any excess NOL lost.
• C) The NOL can be carried forward five years, with any excess NOL lost.
• D) The NOL can be carried back two years and carried forward 20 years, with any excess NOL lost.

---

Definitions:

Striated Involuntary

Relating to muscle tissue that is marked by a pattern of stripes or striations and is not under conscious control, such as the heart muscle.

Axons

Long, slender projections of nerve cells (neurons) that transmit electrical impulses away from the neuron's cell body.

Action Potentials

Rapid changes in the electrical charge of a neuron's membrane, facilitating the transmission of nerve impulses.

Neurons

Specialized cells within the nervous system that transmit information to other neurons, muscles, or gland cells.