Question

In taxable years prior to 2018, an NOL could be carried back 3 tax years and forward 20 years.

a-true
b-false

Answer 1

True, businesses could carry back an NOL 3 years and forward 20 years in taxable years prior to 2018. This tax regulation has since changed with new legislation.

Step-by-step explanation:

The statement that an NOL could be carried back 3 tax years and forward 20 years in taxable years prior to 2018 is true. This tax provision allowed businesses to apply a net operating loss (NOL) to past and future tax filings which could result in a tax refund or reduced tax liability. Prior to the Tax Cuts and Jobs Act of 2017, businesses had the option to carry back an NOL to the previous three tax years and carry forward to the next twenty years to offset taxable income. However, these rules were subject to changes under the subsequent legislation.