Question

If a corporation has a net operating loss after deducting the full DRD, does the modified taxable income limitation apply?

1) True
2) False

Answer 1

If a corporation has a net operating loss after deducting the full DRD, the modified taxable income limitation does not apply.

Step-by-step explanation:

The answer is False. If a corporation has a net operating loss after deducting the full DRD (dividends received deduction), the modified taxable income limitation does not apply. The modified taxable income limitation is used to determine the amount of the net operating loss that a corporation can deduct in a given tax year. However, if the corporation has a net operating loss, it may be able to carry that loss forward to offset future taxable income, subject to certain limitations and rules.