Question

Lansing, Inc. incurred a net operating loss of $10,000,000 in 2018. Lansing, Inc. reports $10,000,000 of taxable income before any NOL carryover in 2019. Lansing, Inc. can offset all of its 2019 taxable income with the 2018 NOL carryover.

True or False

Answer 1

False

Step-by-step explanation:

According to the section of 172(a) of the Tax Cuts and Jobs Act (TCJA), if the losses are arising at the beginning on or after January 1, 2018, The deduction for net operating loss would be equal to the minimum of

1. Carryover available of net operating loss

OR

2. 80% of taxable income

So according to the section, the

1. Carryover of net operating loss available is $10,000,000

OR

2. 80% of $10,000,000 = $800,000

So, Net operating loss deduction for 2019 is $800,000

But if the losses are arising before January 1, 2018, so the minimum criteria is not applicable

Hence, the given statement is false.