If a sole proprietorship has a net operating loss for the current period, the loss can only be used to offset other business income in the current year. Any current loss can be carried back three years and forward five years and used to offset business income in those years.

Question

Quizplus · Accepted Answer

For sole proprietorships, a net operating loss can be used to offset both business and non-business income. It can also be carried back to the two preceding years to generate a refund and carried forward up to 20 years to offset future income, not just limited to three years back and five years forward.

If a Sole Proprietorship Has a Net Operating Loss for the Current