In 2019, BYC Corporation (a C corporation) had an NOL carryover from 2017 in the amount of $40,000. How much tax will BYC pay in 2019 if it reports taxable income from operations of $35,000 in 2019 before the NOL deduction?
What will be an ideal response?
None. BYC's NOL of ($40,000) is available to offset income generated by BYC in 2019. Since BYC earned $35,000 of taxable income in 2019 before the NOL deduction, it can use ($35,000) of the loss carryover from 2017 to offset its entire taxable income. BYC will have a ($5,000) loss carryover available for 2020 and beyond.
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What will be an ideal response?
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