ExpertMedium1 markMultiple Choice
CPA · Question 67 · Area I: Individual Compliance and Planning
A taxpayer has a Net Operating Loss (NOL) from a farming business in Year 1. What is the carryback period?
A taxpayer has a Net Operating Loss (NOL) from a farming business in Year 1. What is the carryback period?
Answer options:
A.
No carryback allowed.
B.
2 Years
C.
5 Years
D.
3 Years
How to approach this question
General NOL: Indefinite forward only. Farming Exception: 2 Year Carryback allowed.
Full Answer
B.2 Years✓ Correct
B
IRC §172(b)(1)(B). Farming losses have a special 2-year carryback period.
Common mistakes
Applying the general 'no carryback' rule.
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