WCC Corporation has a $115,000 net operating loss carryover to 2023 from a previous year. Assume that it reported $78,000 of taxable income in 2023 (before the net operating loss deduction) and $45,000 of taxable income in 2024 (before the net operating loss deduction). What is WCC's taxable income in 2023 and 2024 (after the net operating loss deduction), assuming the $115,000 NOL carryover originated in 2020 and WCC elected to forgo the NOL carry back option?

Under the Tax Cuts and Jobs Act (TCJA) of 2017, for losses arising in tax years beginning after December 31, 2017, and before January 1, 2021, net operating losses (NOLs) can be carried forward indefinitely but can no longer be carried back (with certain exceptions for farming losses and insurance companies). Additionally, for these years, the NOL deduction was limited to 80% of taxable income (determined without regard to the deduction). However, the Coronavirus Aid, Relief, and Economic Security (CARES) Act temporarily removed the 80% taxable income limitation for tax years beginning before January 1, 2021, allowing businesses to fully offset taxable income with NOLs for these years. The CARES Act also allowed for a five-year carryback for NOLs arising in tax years 2018, 2019, and 2020. Since WCC Corporation's NOL carryover originated in 2020 and they elected to forgo the carryback option, they can carry the NOL forward to offset future taxable income. For 2023: WCC Corporation has a taxable income of $78,000 before the NOL deduction. Since the NOL carryover is $115,000, which is more than the taxable income, WCC can use the NOL to reduce its taxable income to $0 for 2023. The remaining NOL of $115,000 -

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