Patrick Has a Business Net Operating Loss of $70,000 in 2017.Patrick's

question 44

Multiple Choice

Patrick has a business net operating loss of $70,000 in 2017.Patrick's business generated significant taxable profits in 2015 and in 2016.Which of the following is true? ​

• A)Patrick may offset income he generated in 2015 and 2016 with 2017'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 only future income.
• D)Patrick may elect to offset the income he generated in 2016 with 2017's net operating loss.The remaining net operating loss (if any)can be used to offset future taxable income.
• E)None of the above.

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Definitions:

Truth in Lending Act

A federal law designed to promote informed use of consumer credit by requiring disclosures about its terms and cost.

Accurate Information

Data or details that are precise, correct, and free from error.

Competence

The ability or capacity to do something effectively, often referring to the requisite skills, knowledge, and experience needed to perform tasks successfully.

Intelligence

The ability to learn from experience, solve problems, and adapt to new situations.