Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps

Exercise 63

LMNO Corporation was formed in 2003. It reported net income (loss) over the 2003 through 2009 tax years, before accounting for any net operating losses, as follows:
2003 $ (4,000)
2004 $ 19,000
2005 $ 23,000
2006 $ (31,000)
2007 $ 11,000
2008 $ ( 8,000)
2009 $ 3,000
a. Determine annual taxable income after accounting for any net operating losses for 2003 to 2009, assuming the corporation does not waive the carryback period. Also determine any NOL carryforward to 2010.
b. Determine annual taxable income after accounting for any net operating losses for 2003 to 2009, assuming the corporation waives the carryback period. Also determine any NOL carryforward to 2010.