A corporation's records show the following: $$\begin{array} { l r r r c r }
2009 & 2010 & 2011 & 2012 & 2013 \
\text { Net operating gain (loss) } & \$ 6,000 & \$ 16,000 & \$ 42,000 & \$ 27,000 & ( \$ 65,000 )
\end{array}$$ Assume the corporation has never had dividend income and its only NOL occurred in 2012.Using the NOL carryback provisions of the Code, on what portion of income in 2012 will tax not be refunded?
A)$0
B)$4,000
C)$20,000
D)$27,000
E)None of the above

Question

A corporation's records show the following: $$\begin{array} { l r r r c r } 
2009 & 2010 & 2011 & 2012 & 2013 \
\text { Net operating gain (loss) } & \$ 6,000 & \$ 16,000 & \$ 42,000 & \$ 27,000 & ( \$ 65,000 )
\end{array}$$ Assume the corporation has never had dividend income and its only NOL occurred in 2012.Using the NOL carryback provisions of the Code, on what portion of income in 2012 will tax not be refunded?
A)$0
B)$4,000
C)$20,000
D)$27,000
E)None of the above

Quizplus · Accepted Answer

The NOL of $65,000 from 2013 can be carried back to offset the taxable income of 2011 ($42,000) and 2010 ($16,000), totaling $58,000. The remaining $7,000 of the NOL will offset part of the 2009 income, leaving $4,000 of 2009 income not offset.

A Corporation's Records Show the Following Assume the Corporation Has Never Had Dividend Income and Its