A taxpayer has a Net Operating Loss (NOL) of $50,000 generated in Year 2 (post-2017). In Year 3, the taxpayer has taxable income of $40,000 before the NOL deduction. What is the maximum NOL deduction allowed in Year 3 and the carryforward amount?

1. Identify NOL Year: Post-2017 (TCJA rules apply).<br/>2. Rule: NOL deduction limited to 80% of taxable income (determined without NOL deduction).<br/>3. Calculate Limit: $40,000 * 80% = $32,000.<br/>4. Determine Deduction: Lesser of NOL ($50,000) or Limit ($32,000). Deduction = $32,000.<br/>5. Calculate Carryforward: $50,000 - $32,000 = $18,000.