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30 October, 12:47

The net operating loss (NOL) provisions of the Internal Revenue Code a. Are primarily designed to provide relief for trade or business losses. b. Require the use of a 2-year carryback in all cases. c. Allow the deduction for home mortgage interest to create an NOL. d. Would not be necessary if tax rates were progressive. e. Apply only to individuals with wages and itemized deductions.

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  1. 30 October, 15:50
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    The correct answer is letter "B": Are primarily designed to provide relief for trade or business losses.

    Explanation:

    The Net Operating Loss or NOL was enacted to offset the differences between taxpayers' deductions due to progressive rates involved in tax calculations. The excess accounted are used as part of tax payment for the company's future tax periods. NOLs could be the result of theft, confiscation or trades. Thus, NOL provisions attempt to partly cover those business losses.
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