Which statement is correct?

Question

Quizplus · Accepted Answer

The income tax system treats income and losses asymmetrically. This means that losses cannot fully offset income in the same tax period. Instead, losses can only be carried forward to future periods to offset future income. This is a common feature of income tax systems around the world, as it helps to ensure that companies and individuals are not able to use losses as a tax shelter. A loss carryforward does not have immediate cash flow benefits to a company, as the company still needs to generate future income to offset the losses.

Which Statement Is Correct