Apply NOL And Business Loss Limitations Practice Test

In tax year 2024, Willow Co., a C corporation, generated a $400,000 net operating loss. Willow’s management asks whether it can carry the loss back to recover taxes paid in 2022 and 2023 under current law. Based on the scenario, which tax treatment is appropriate?

In tax year 2023, Aspen LLC is a partnership that allocates to Partner B an ordinary loss of $500,000 from a trade or business in which Partner B materially participates. Partner B has $100,000 of dividends and $50,000 of interest income and no wages. Assume basis and at-risk limitations do not apply. How should the entity account for excess business losses on Partner B’s return?