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An NOL has the potential to generate extra revenue for the taxpayer For the NOL year...

An NOL has the potential to generate extra revenue for the taxpayer For the NOL year As a refundable credit As an adjustment to gross income For the carryback carry forward year

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Answer #1

Yes, the given statement is true. It can be further explained well by way of an example. If a company occurs net operating loss (after tax deductions) of $200000 in current year then it can be used for lowering tax payments of previous years or it can be adjusted against income which would be earned in the future.

Thus a net operating loss has the potential to generate extra revenue for the tax payer in terms of low tax payments in the future by adjusting the net operating loss of current year from future/ past income and would subsequently result into reduced tax payments.

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