Luther Industries has outstanding tax loss carryforwards of $72 million from losses over the past four years. If Luther earns $15 million per year in pre-tax income from now on, in how many years will Luther first pay taxes?

Question

Quizplus · Accepted Answer

D) The number of years the tax loss carryforwards will last can be calculated as the tax loss carryforward dividend by the annual pre-tax income or:
years with no 11ea84dc_f548_77e0_9a63_6d036670a005_TB1316_11_TB1316_11 so Luther won't have to pay taxes for the next four years, but will have to start paying some taxes five years from now.

Luther Industries Has Outstanding Tax Loss Carryforwards of $72 Million