Silver Co. reported income before income tax expense of $60,000 for year 2. Silver had no permanent or temporary timing differences for tax purposes. Silver has an effective tax rate of 30% and a $40,000 net operating loss carryforward from year 1. What is the maximum income tax benefit that Silver can realize from the loss carryforward for year 2?
A. $12,000
B. $18,000
C. $20,000
D. $40,000
Answer:A
This answer is correct. The $40,000 net operating loss carryforward is the amount of loss in year 1 which may be carried forward to future years to offset the tax due in those years. The value of the carryforward is the net operating loss multiplied by the tax rate for the year in which the carryforward is expected to be realized. Therefore, the maximum income tax benefit that Silver can realize from the carryforward in year 2 is $12,000 ($40,000 × 30%). NOL可以給企業(yè)帶來(lái)tax benefits，以及deferred tax asset。