Losses, Carryback and Carryforward

43

• Net Operating Losses, Carryback (CB) and Carryforward (CF):

  • Tax law allows losses of one period to offset income of another.
  • Loss CB/CF option: First back three years and then forward 15.
  • Loss CF option: Forward 15. This may be attractive if there will be losses of benefits due to tax credits or anticipated/enacted increases in tax rates.
  • CB: Immediate recognition: Journal entry

Refund receivable XX

Benefit CB (offset to tax expense) XX

Previous slide

Next slide

Back to first slide

View graphic version