If a C corporation incurs a net operating loss in 2017, it may carry the loss back two years and forward 20 years to offset income in those years. However, it may offset only 80% of the taxable income before the NOL deduction in those years.

Question

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The rule allowing a net operating loss (NOL) to offset only 80% of taxable income was introduced by the Tax Cuts and Jobs Act of 2017 and applies to NOLs arising in tax years beginning after December 31, 2017. For NOLs incurred in 2017, the previous rules apply, allowing a two-year carryback and 20-year carryforward without the 80% limitation.

If a C Corporation Incurs a Net Operating Loss in 2017