A taxpayers net operating loss (NOL) under current law:

A Can be carried back 2 years

B Can be carried forward indefinitely but limited to 80% of taxable income

C Is not deductible

D Expires after 5 years

✓ Correct Answer: Option B

Post-TCJA: NOLs carry forward indefinitely, limited to 80% of taxable income (for losses arising after 2017). No carryback generally.

💡 Why is B) the correct answer?

The correct answer to the question "A taxpayers net operating loss (NOL) under current law:" is Option B: Can be carried forward indefinitely but limited to 80% of taxable income.

The other options — A) Can be carried back 2 years, C) Is not deductible, D) Expires after 5 years — are incorrect for this CPA Exam Prep question. As explained above: Post-TCJA: NOLs carry forward indefinitely, limited to 80% of taxable income (for losses arising after 2017). No carryback generally.

📚 About This CPA Exam Prep Practice Question

This 2-level CPA Exam Prep question from the Regulation (REG) topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CPA Exam Prep practice test or use flashcards for spaced repetition review.

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A taxpayers net operating loss (NOL) under current law:

✓ Correct Answer: Option B

📚 About This CPA Exam Prep Practice Question

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