If I may follow up with you on this topic.
The NOL in this case will not go up, because the business was sold. Therefore, the amount will only decrement going forward by how much is used every year. I looked into the worksheets that you recommended but I could not figure out which one to use for this case.
As an example, lets say that $30,000 of NOL is available for tax year 2023 and that the taxable income in 2023 is $10,000. I have read that 80% of taxable income can be applied to the available NOL. Therefore:
1. 80% X 10, 000 = 8,000 than can be used in tax year 2023.
2. 22,000 NOL rolls to future years.
Is this correct, or is it an oversimplification of the calculation?
Thank you in advance.
