Fender Corporation was organized in 2006 and had profits in 2006 and 2007.The corporation had an NOL in 2008.The corporation should elect to forgo carrying the NOL back:
A)If tax rates in the preceding years were low and if higher tax rates are expected in the future.
B)If tax rates in the preceding years were high and if lower tax rates are expected in the future.
C)If all of the NOL cannot be used in the carryback years.
D)If it cannot accurately predict future tax rates.
E)None of the above.

Question

Quizplus · Accepted Answer

Fender Corporation should elect to forgo the NOL carryback if tax rates in the two preceding years were low and if higher tax rates are expected in the future (choice a.).Before electing to forgo an NOL carryback,a corporation should be able to predict with confidence that future tax rates will be higher (choice d.)

Fender Corporation Was Organized in 2006 and Had Profits in 2006