Which of the Following Statements Regarding Net Operating Losses Generated

question 13

Multiple Choice

Which of the following statements regarding net operating losses generated in 2019 is True?

• A) Corporations can carry NOLs back two years and forward up to 20 years.
• B) A corporation can carryover the NOL indefinitely.
• C) A corporation can carry NOLs back two years and forward indefinitely.
• D) When a corporation applies a net operating loss carryover, it reports a favorable, permanent book-tax difference in the amount of the applied carryover.
• E) None of these is a True statement.

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Definitions:

Great Recession

A significant global economic downturn that began in 2007 and lasted until 2009, marked by the collapse of the housing market and financial crisis.

Keynesian

Relating to the economic theories of John Maynard Keynes, which advocate for government intervention to manage business cycles and stimulate the economy during downturns.

New Classical

An economic theory that emphasizes the importance of rational expectations and market-clearing prices in understanding economic fluctuations.

Rational Expectations

The hypothesis that forecasts of future values of economically relevant variables are based on all available information and are therefore optimal.