Which of the following statements regarding net operating losses generated in 2017 is true?
A) Corporations can carry net operating losses back two years and forward up to 15 years.
B) A corporation may elect to forgo carrying a net operating loss back and instead carry it over to future years.
C) When a corporation applies a net operating loss carryover, it reports a favorable, permanent book-tax difference in the amount of the applied carryover.
D) Marginal tax rates are irrelevant in determining the tax benefit of applying a net operating loss carryback or carryover.
E) None of these is a true statement.

Question

Quizplus · Accepted Answer

Corporations can carry net operating losses back up to two years and forward up to 20 years (not 15 years as stated in option A). Option C is incorrect because applying a net operating loss carryover does not create a permanent book-tax difference. Option D is incorrect because the tax benefit of applying a net operating loss carryback or carryover is dependent on the corporation's marginal tax rate. Therefore, the only true statement is option B, which states that a corporation may elect to forgo carrying a net operating loss back and instead carry it over to future years.

Which of the Following Statements Regarding Net Operating Losses Generated