While a C Corporation's Losses Cannot Be Used by Their

question 34

Multiple Choice

While a C corporation's losses cannot be used by their shareholders to offset personal income, a C corporation may carry back and carry forward losses to help offset thetaxable income a corporation had or will have. How are these net operating losses carried back and carried forward?

• A) Carried back two years, carried forward five years.
• B) Carried back indefinitely, carried forward two years.
• C) Carried back two years, carried forward twenty years.
• D) Carried back two years, carried forward indefinitely.
• E) None of the choices are correct.

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Definitions:

Income

Earnings received by an individual or entity, including wages, salaries, investments, and other forms of compensation, which are subject to tax.

Schedule B

A section of IRS tax forms for reporting interest and dividend income.

Interest Income

Income earned from various forms of investments that pay interest, such as savings accounts, CDs, and government bonds, subject to income tax.

Dividend Income

Income received from owning shares in a corporation, typically paid out from the corporation's profits.