How Do Companies Take Advantage of the Tax Loss Carryforward Rule? || NOL Carryforward Explained
A tax loss carryforward is a provision that allows taxpayers/businesses to move tax loss in the current year to offset profit in future years. It reduces tax payments and creates tax savings.
Net operating losses (NOLs) occur when business income is less than expenses. Under the Tax Cuts and Jobs Act (TCJA), an NOL can be carried forward indefinitely. However, it is limited to 80% of taxable net income.
Through two examples (one simple and one more complex) you will learn how Tax Loss Carryforward is used.
———————CHAPTERS———————————
00:00 - What are Tax Loss Carryforwards?
00:56 - Before the 2018 TCJA Rule
01:42 - After 2018, the Current Rule
03:07 - Who can take advantage?
04:02 - Simple Example
05:06 - Complex NOL Example
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Link to the Example in the Video:
https://docs.google.com/spreadsheets/...
Tax Loss CarryForward:
https://www.investopedia.com/terms/t/...
https://www.investopedia.com/terms/n/...
Loss CarryForward Explained:
https://www.thebalancemoney.com/tax-l...
#taxguide101 #akistepinska
---------------------------DISCLOSURE------------------------------------------
The information presented in this video is for informational and educational purposes only. It is not intended to render tax advice for any specific situation. Those needing assistance with a specific situation should consult with a qualified Tax Professional.
The information in this video is based on current tax law and IRS regulations as of date of recording and is subject to change.
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