Tyler, a single taxpayer, generates business income of $3,000 in 2016. In 2017, he generates an NOL of $2,000. In 2018, he incurs another NOL of $5,000. In 2019, he generates a modest business income of $ 6,000 and then in 2020, the COVID-19 pandemic results in an NOL of $13,000. Assume that in all years, Tyler adopts the NOL treatment that results in the earliest and greatest refund. Provide a chronological analysis of Tyler's treatment on NOLs through 2020.
Tyler, a single taxpayer, generates business income of $3,000 in 2016. In 2017, he generates an NOL of $2,000. In 2018, he incurs another NOL of $5,000. In 2019, he generates a modest business income of $ 6,000 and then in 2020, the COVID-19 pandemic results in an NOL of $13,000. Assume that in all years, Tyler adopts the NOL treatment that results in the earliest and greatest refund. Provide a chronological analysis of Tyler's treatment on NOLs through 2020.
With explaination please. Thanks
As per IRS, the net operating losses are the excess of tax-deductible expenses over taxable revenues for a taxable year. It is often referred as a tax credit and carried back two prior years to the NOL or carried forward up to 20 years.
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
