Ladow Inc. incurred a $32,000 net operating loss in 2013. Ladow's 2011 taxable income was $28,000, and its 2012 taxable income was $149,200. Use the corporate tax rates included in Appendix C to compute Ladow's refund from an NOL carryback deduction.

Question

Quizplus · Accepted Answer

Ladow Inc. can carry back the $32,000 net operating loss to 2011 and 2012. The 2011 taxable income of $28,000 can be offset entirely, resulting in a refund of $5,760 (28,000 * 20% tax rate). The remaining $4,000 of the NOL can be carried back to 2012, but the refund from 2011 is $5,760.

Ladow Inc Incurred a $32,000 Net Operating Loss in 2013