Module 7: NOLs and Capital Loss Limitations

Question 1

What is the carry over period for NOLs?

Hindsight is 2 x 20…20/20

Answer 1

2 years back

20 years forward

Question 2

What is not allowed when calculating the corporate NOL?

Answer 2

1. Charitable contribution deduction not allowed
2. Taxable income limitation normally imposed on DRD does not apply if NOL
3. Domestic production activities deduction not allowed
4. NOL deduction from carryback/forward not allowed
5. Cannot deduct a capital loss carryback against a net capital gain (but may deduct capital loss carryover from current year capital gain)

Question 3

Is the $3,000 deduction for net capital loss available to indivs allowed for corps?

Answer 3

No

Corps can only use capital losses to offset capital gains

Question 4

What is the carryover period for capital losses?

Answer 4

Net capital losses are carried back 3 year and forward 5 years as short-term capital losses and applied only to capital gains

Question 5

What tax rates are capital gains taxed at for corporations?

Answer 5

ordinary tax rates