Which of the following statements regarding net operating losses is true?
A)A corporations can carry a net operating loss incurred in 2017 forward indefinitely.
B)A corporation can carry forward a net operating incurred in 2018 to 2019 but it may offset only 80 percent of taxable income (before the NOL deduction)in 2019.
C)When a corporation applies a net operating loss carryover,it reports a favorable,permanent book-tax difference in the amount of the applied carryover.
D)None of these is a true statement.

Question

Quizplus · Accepted Answer

According to the tax law changes made in 2017, a corporation can carry forward a net operating loss incurred in 2018 to subsequent years indefinitely, but it can only offset 80 percent of taxable income in the carryforward year. Option A is incorrect because it pertains to the previous tax law, under which a corporation could carry forward net operating losses for up to 20 years. Option C is incorrect because applying a net operating loss carryover does not create a book-tax difference but rather reduces the amount of taxable income reported. Option D is incorrect because option B is a true statement.

Which of the Following Statements Regarding Net Operating Losses Is