The carryover period for the NOLs of a C corporation continues to run during S corporation years.

Question

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The carryover period for the net operating losses (NOLs) of a C corporation continues to run during S corporation years. This means that if a C corporation elects S corporation status, the NOLs incurred during the C corporation years can be used to offset the S corporation taxable income in the future. However, there are certain limitations and rules that apply to the usage of NOLs in an S corporation.

The Carryover Period for the NOLs of a C Corporation