Which of the following statements regarding net operating losses generated in 2013 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

A corporation may elect to forgo carrying a net operating loss back and instead carry it over to future years. Choice A is incorrect because the carryback period was extended to five years for losses incurred in 2018, 2019, and 2020. Choice C is incorrect because applying a net operating loss carryover does not create a book-tax difference. Choice D is incorrect because marginal tax rates are relevant in determining the tax benefit of applying a net operating loss carryback or carryover.

Which of the Following Statements Regarding Net Operating Losses Generated