Question

While a C corporation's losses cannot be used by their shareholders to offset personal income, a C corporation may carry back and carry forward losses to help offset the taxable income a corporation had or will have. How are these net operating losses carried back and carried forward

Answer 1

A C corporation, under United States federal income tax law, refers to any corporation that is taxed separately from its owners

Step-by-step explanation:

Since a C corporation's losses cannot be used by their shareholders to offset personal income

C corporations must follow a specific order when carrying capital losses back and forward.

When a net capital loss is carried back to a year that has a capital gain, the loss is subtracted from the gain of that year, reducing the corporation's taxable income for that year while the full loss from the first year can be carried forward on the balance sheet to the second year as a deferred tax asset

C corporations may carry a net capital loss back three years and forward up to a maximum of five years.