Which of the following statements is correct? Corporate net operating losses are not permitted. A corporation can elect to carry a 2017 net operating loss back 5 years. A 2017 net operating loss can be carried back two years and forward 20 years. A corporation can elect to carry a 2019 net operating loss back two years and forward indefinitely.

Which of the following statements is correct? Corporate net operating losses are not permitted. A corporation can elect to carry a 2017 net operating loss back 5 years. A 2017 net operating loss can be carried back two years and forward 20 years. A corporation can elect to carry a 2019 net operating loss back two years and forward indefinitely.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter17: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 10DQ

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Which of the following statements is incorrect with respect to the treatment of a net operating loss arising in 2022? a.Unlike individuals, corporations do not adjust their NOLs for net capital losses or nonbusiness deductions. b.The deduction for any carryover year of the NOL is limited to 80% of taxable income (determined without regard to the NOL deduction). c.A corporation may claim a dividends received deduction in computing an NOL. d.An NOL is generally carried back 2 years and forward 20 years.
For each of the following subsequent events, indicate whether a company should (a) adjust the financial statements, (b) disclose in notes to the financial statements, or (c) neither adjust nor disclose.1. Settlement of a tax case at a cost considerably in excess of the amount expected at year-end.2. Introduction of a new product line.3. Loss of assembly plant due to fire.4. Sale of a significant portion of the company’s assets.5. Retirement of the company president.6. Issuance of a significant number of ordinary shares.7. Loss of a significant customer.8. Prolonged employee strike.9. Material loss on a year-end receivable because of a customer’s bankruptcy.10. Hiring of a new president.11. Settlement of prior year’s litigation against the company (no loss was accrued).12. Merger with another company of comparable size.
Gold Corporation, a calendar year C corporation, was formed several years ago and has been profitable until the current year. In the current year, Gold incurs a net operating loss. Identify the issues that Gold Corporation should consider regarding its NOL.
Industries Inc. began carrying on business in 2019 and has a December 31 taxation year end. While it was fairly successful in its first year of operation, excessive production of an unmarketable product resulted in a large business loss for 2020. Profits have returned in 2021 and 2022. Find the minimum net income and taxable income for 2019. Indicate the amount and type of any losses that are available to be applied to other taxation years. What is the minimum net income? What is the taxable income? What is the net capital loss?
Gray, Inc., a C corporation, has taxable income from operations of $1,452,000 for 2022. It also has a net long-term capital loss of $355,000 from the sale of a subsidiary's stock. The year 2022 is the first year in the last 10 years that Gray has not had at least $500,000 per year of net long-term capital gains. What is Gray's 2022 taxable income? What, if anything, can it do with any unused capital losses? If an amount is zero, enter "0". Because Gray may deduct $fill in the blank 1 of the capital losses this year, its taxable income is $fill in the blank 2. Any unused loss may be carried back for choose answer: (three - five -seven) years, then carried forward for choose answer: (five- three -seven) years as a choose answer: (short-term capital loss- long-term capital loss) against Gray's capital gainsordinary taxable income .
Mira Company was authorized by their board of directors to issue their financial statements on April 1, 2021 which shows a profit before tax for the year ended December 31, 2020 at P 9,500,000. A fire occurred at one of their sites on February 15, 2021 with damages amounting to a total of 6,000,000. It was covered with an insurance but only at P 4,000,000. The said amount can only be collected on May 1, 2021 when repairs will be paid. What amount will be disclosed on the company's notes to financial statements?
In 2019 Hill Corporation reported a net operating loss of $13,200 that it carried forward to 2020. In 2019 Hill also reported a net capital loss of $6,850 that it carried forward to 2020. In 2020, ignoring any carryovers from other years, Hill reported a loss for tax purposes of $69,000. The current-year loss includes a $16,900 net capital gain.What is Hill’s 2020 net operating loss? 2020 Net operating loss
The following events occurred for Scythian, Inc. between its December 31, 2022 year-end and the issuance of its financial statements on February 28, 2023: Event 1: The company settled a disagreement with the Internal Revenue Service regarding income taxes payable for 2021. Scythian had accrued income taxes payable of $3,000,000. The settlement requires payment of $3,200,000. Event 2: The company’s 3rd largest customer abruptly declared bankruptcy because of the CEO’s embezzlement of company funds. At year-end, the customer owed Scythian $1,200,000 but had made a payment of $400,000 in January 2023. Event 3: Employees at one of the company’s largest plants went on strike in January 2023. The strike is expected to cost the company between $500,000 and $1,000,000 in lost revenue. What is the net effect of these events on 2022 net income?
Lonergan, Inc., a calendar year S corporation in Athens, Georgia, had a bal- ance in AAA of $200,000 and AEP of $110,000 on December 31, 2020. Dur- ing 2021, Lonergan, Inc., distributes $140,000 to its shareholders, while sustaining an ordinary loss of $120,000. Calculate the balance in Lonergan’s AAA and AEP accounts at the end of 2021.
WCC Corporation has a $105,000 net operating loss carryover into 2021. Assume that it reported $76,000 of taxable income in 2021 (before the net operating loss deduction) and $35,000 of taxable income in 2022 (before the net operating loss deduction). (Leave no answer blank. Enter zero if applicable.) a. What is WCC’s taxable income in 2021 and 2022 (after the net operating loss deduction), assuming the $105,000 NOL carryover originated in 2016?
The XR Company’s Financial Year Ended on December 31, 2021. However, before the completion of the audit in February 2023 it was determined the company lost a case that was at court before the end of the financial year, but the outcome was uncertain. The auditor will disclosed this information as: a. An unusual occurrence b. A tax liability for the company c. A subsequent event. d. An annual expense
Palmer Co. had a deferred tax liability balance due to a temporary difference at the beginning of 2022 related to P600,000 of excess depreciation. In December of 2022, a new income tax act is signed into law that lowers the corporate rate from 40% to 35%, effective January 1, 2024. If taxable amounts related to the temporary difference are scheduled to be reversed by P300,000 for both 2023 and 2024, Palmer should increase or decrease deferred tax liability by what amount? Decrease by P30,000 Decrease by P15,000 Increase by P15,000 Increase by P30,000

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		Corporate net operating losses are not permitted.
		A corporation can elect to carry a 2017 net operating loss back 5 years.
		A 2017 net operating loss can be carried back two years and forward 20 years.
		A corporation can elect to carry a 2019 net operating loss back two years and forward indefinitely.