Baker Corporation Suffers a Net Operating Loss NOL) of $65,000

question 74

Short Answer

Baker Corporation suffers a net operating loss NOL) of $65,000 in 2013. Baker was incorporated in 2011. Baker had a NOL of $20,000 in 2011 and taxable income of $35,000 in 2012. The corporation expects a taxable income of $200,000 in 2014. What valid alternatives are available to Baker concerning the $50,000 loss? I. Baker can carryback the loss to 2014 and will receive a refund of $2,250. II. Baker can elect to carryforward the loss and expect to receive tax savings of $19,500. Only statement I is correct. Only statement II is correct. Both statements are correct. Neither statement is correct.

---

Definitions:

Whole Blood

Whole blood refers to the complete, unseparated collection of blood drawn from a donor, containing red cells, white cells, platelets, and plasma.

Oocytes Donation

The process by which a woman provides one or several oocytes, or eggs, for purposes of assisted reproduction or biomedical research.

Naproxen

A nonsteroidal anti-inflammatory drug (NSAID) used to relieve pain, swelling, and inflammation, similar to ibuprofen but with a longer duration of action.

Empty Bottle

A bottle that contains no liquid or content, often implying it has been used or consumed.