Ladow Inc. incurred a $32,000 net operating loss in 2015. Ladow's 2013 taxable income was $28,000, and its 2014 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

The NOL of $32,000 can be carried back to 2013 first, offsetting the $28,000 taxable income, resulting in a refund of $5,760 (28,000 * 20%). The remaining $4,000 NOL can be carried back to 2014, but it does not affect the refund calculation for 2013.

Ladow Inc Incurred a $32,000 Net Operating Loss in 2015