Which of the Following Statements Regarding Net Operating Losses Is

question 8

Multiple Choice

Which of the following statements regarding net operating losses is true?

• A) Corporations can carry net operating losses back two years and forward up to 15 years.
• B) A corporation may elect to forgo carrying a net operating loss back and instead carry it over to future years.
• C) When a corporation applies a net operating loss carryover, it reports a favorable, permanent book-tax difference in the amount of the applied carryover.
• D) Marginal tax rates are irrelevant in determining the tax benefit of applying a net operating loss carryback or carryover.
• E) None of these is a true statement.