Can someone help me with the question below:
Brass Co. reported income before income tax expense of $60,000 for year 2. Brass had no permanent or temporary timing differences for tax purposes. Brass 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 Brass can realize from the loss carryforward for year 2?
A. 12,000
B. 18,000
C. 20,000
D. 40,000
Due to the Tax Cuts and Jobs Act of 2017, NOL can be carried forward indefinitely (up to 80% of taxable income). Wiley says the answer is A. Is this still the case or would the correct answer be D?
Good luck to everyone taking audit this quarter!