cch federal taxation salt lake resorts inc 453997

In 2010, Salt Lake Resorts Inc. generated a capital gain of $300,000 and no other taxable

income or loss. In 2012, the corporation suffered a net operating loss of $50,000, which was

carried back to 2010. Salt Lake Resorts Inc. did not make an election to carryforward only.

The corporation has a large tax preference. The IRS claims that (1) no tax benefit results from

the carryback, and (2) the NOL is nevertheless used up. Slat Lake Resorts Inc. believes that

either a tax benefit results or it can carryforward the $50,000 net operating loss to 2013. Is

the IRS right? Why?