On their December 31, 2019 tax return, Ecogreen, Inc., a C corporation, suffered a difficult year and generated a loss. What are Ecogreen's options for dealing with the loss for tax purposes?

Question

Landin Bender

Business

14 January, 05:28

On their December 31, 2019 tax return, Ecogreen, Inc., a C corporation, suffered a difficult year and generated a loss. What are Ecogreen's options for dealing with the loss for tax purposes?

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Answers (1)

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Marques Gross · Answer 1

D) Carry the loss forward to reduce income in future years

Explanation:

The IRS allows corporations to carry losses both forward and backwards in order for them to reduce their taxable income. A corporation can carry an operating loss back two years, and it can carry them forward up to 20 years in order to reduce taxable income generated in subsequent years. A backwards carryover lowers the taxes that the corporation might owe to the government.