Net Operating Losses
Assume the following facts:
2005 taxable income (modified) $19,000
2006 net operating loss ($24,000)
2007 taxable income (modified) $24,000
2008 taxable income (modified) $36,000
2009 net operating loss ($30,000)
2010 net operating loss ($34,000)
Also assume:
1) That the taxpayer has consistently elected to carryback the net operating losses as incurred and elected the "two-year" carryback provision.
2) There was no taxable income in tax years prior to 2005.
Required:
a) To what years can the 2006,2009 and 2010 net operating losses be carried back? (show amount of carryback and years involved)
b) After applying the net operating losses for 2006, 2009 and 2010 to prior years ( if and where permitted), what amount, if any, is available as a net operating loss to be carried forward to future years?