Question

DeMaria Corporation, a calendar year corporation, generates the following taxable income (net operating losses) since its inception in 2016: Year Taxable result 2016 40,000 2017 (15,000) 2018 (5,000) 2019 6,000 Assuming Demaria makes no special elections with regard to NOLs, what is DeMaria's net operating loss carryforward into 2020?

Answer 1

Answer:

Carry-forward to 2020 = $200

Step-by-step explanation:

In case of no election with regards to NOL, For year prior 2018, NOL will automatically carryback.

But after year 2018, NOL can only be carryforward inficately, lessor of actual NOL or 80% of taxable income.

Therefore, NOL of $15,000 will be carried back

But loss of $5,000 will be carryforward up to 80% of Taxable Income in 2019

NOL Offset in 2019 - Lessor or $5,000 or $6,000*80% = $4,800

Carry forward to 2020 = $5,000 - $4,800 = $200