Question

2.	Compute the tax liabilities for each year along with tracking any NOL.
	The company's objective is to use the carryback and then the carryforward to ensure its
	tax liability is as small as possible
	These figures are for a company with yearly revenues of over $15 million
		Net Income/			Net Income/
a.		(Loss)	b.		(Loss)
	2001	20,000		2001	(25,000)
	2002	12,000		2002	(1,000)
	2003	(13,000)		2003	4,000
	2004	4,000		2004	6,000
	2005	8,000		2005	(5,000)
	2006	9,000		2006	7,000
	2007	(3,000)		2007	6,000
				2008	(2,000)
				2009	9,000
	(check figure: tax liability = 5,550)			(check figure: tax liability = 0)

Answer 1

Given question is related to taxation and have to calculate tax liability for the given current periods.

Refer below images for detail solution.
Corporate Tax Table: Taxable income Tax Rate Income O 5oooo 50000 - 75000 75000 - 100 000 IDO OTO - 335000 337000 - 10,000,000 50 coo 25000 15. 25.1. 34 39. 341 235000 9 665000 Example Suppose is if income 151. and is 10,000 then tax trobitty is tax rate appt cable 10000 x 15% = 1500/- Carry back 2 years 5 years for Requive an revenues L $15 Million amended tax return Carry forward 20 years Does not require an. amended tax return NoL is based upon form 1045 * Revenues of $ 20 million past a. Tax Income Tax income Tax Tax liability Ciobile Amended Tax income Tax tablity NOL Net income year 2001 2002 net income 20 000 20000 12.000 3000 1800 20000 12000 1000 150 12 000 (1800) 19000 (13000) 2003 2004 2100D 4000 3000 450 1200 900 2005 8000 9000 29000 38000 Gooo 900 8ooo 9000 (3000) 2006 35000 2007 29,000 5,550

part b. year Net income Tax income Armended Fax incore Tay liability NOL Tax liability 1 2001 2002 2003 1 २००4 (25000) (26ooo) (2000) (16000) (21000) (14000) (8000) (DOLD) (1000) (25000) (1000) 4000 6000 (5000) 7000 6000 (2000) 9000 1 20005 2006 1 1 2007 2008 2009 (1000) points:- Note 1 Tax liability = 2. NOL means for income tax result when a ots Takable Tax income X Appt cable Tax rate of per corporate tox table. Net operating loss. porpore, a net operating loss is the company's allowable deductions exceed. inome within a tax period.