Final answer:
The statement that corporations may carry a net operating loss from 2019 back two years and forward 20 years is false. Changes in tax laws under the TCJA and the CARES Act have altered the rules for net operating loss carrybacks and carryforwards.
Step-by-step explanation:
False. The claim that corporations may carry a net operating loss sustained in 2019 back two years and forward 20 years is no longer accurate due to changes in tax laws. Under the Tax Cuts and Jobs Act (TCJA) of 2017, the rules for net operating loss (NOL) carrybacks and carryforwards were modified.
For losses arising in tax years ending after December 31, 2017, the TCJA eliminated the option to carry back NOLs to previous tax years (with limited exceptions for certain industries), but it permitted indefinite carryforwards, subject to an annual limitation of 80% of taxable income.
However, subsequent legislation, specifically the Coronavirus Aid, Relief, and Economic Security (CARES) Act, temporarily adjusted these rules for losses incurred in 2018, 2019, and 2020, allowing a five-year carryback period for those losses. Because tax laws continue to evolve, it's important for businesses and individuals to stay informed of the current rules governing NOLs.