Question

In the year 2020, All-Star Corporation has a net operating loss. According to the CARES Act, what is the provision for carrying back the loss? 1) Not allowed 2) Allowed 3) Depends on the circumstances 4) Cannot be determined from the information given

Answer 1

According to the CARES Act, the provision for carrying back a net operating loss in 2020 is that it's allowed. This act permits businesses to carry back losses to offset profits from prior years.

Step-by-step explanation:

In the year 2020, if All-Star Corporation has a net operating loss, the provision for carrying back the loss, according to the CARES Act, is that it is allowed. More specifically, the CARES Act permits businesses to carry back net operating losses (NOL) arising in tax years 2018, 2019, and 2020 to the previous five years (2013-2017). This enables companies like All-Star Corporation to offset profits from prior years, and potentially receive a tax refund, thus improving their financial status in challenging times.

Learn more about tax loss carryback