Net operating losses may generally be carried back two years

Net operating losses may generally be carried back two years and forward 20 years.

True

False

Solution

True

Net operating Loss NOL, takes place when the revenues of a business are less than its operating expenses.

1. Net operating Loss can be carried back to two years, which can be used for availing rebate of tax

2. It can be carried forward for twenty years and taxable income can be reduced during those years.