Patrick Has a Business Net Operating Loss of $70,000 in 2019

question 11

Multiple Choice

Patrick has a business net operating loss of $70,000 in 2019. Patrick's business generated significant taxable profits in 2017 and in 2018. Which of the following is true?

• A)Patrick may offset income he generated in 2017 and 2018 with 2019's net operating loss by carrying the net operating loss back to each of those tax years. The remaining net operating loss (if any) can be carried forward and used to offset future taxable income.
• B)Patrick may use the net operating loss to offset income from any year he chooses.
• C)Net operating losses can offset 80% of the income in future years.
• D)Patrick may elect to offset the income he generated in 2018 with 2019's net operating loss. The remaining net operating loss (if any) can be used to offset future taxable income.
• E)None of these

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Definitions:

Genetic Disorder

A condition caused by abnormalities in an individual's DNA, affecting various body functions and characteristics.

Hunger Pangs

Feelings of discomfort or weakness caused by a lack of food, often signaling the need to eat.

Body Mass Index

A measure of body fat based on height and weight that applies to adult men and women, used to categorize underweight, normal weight, overweight, and obesity.

Obese

Having an excessive amount of body fat, typically measured by body mass index (BMI) of 30 or higher.