How do you calculate income tax when ... - Finance information

Question by Dactylonomy : How do you calculate income tax when generating a net profit after two net losses
Say a firm has a net loss of 8803 in one month and the month second in 6573. In year three, it makes a profit (before income tax) of 20824th There are no dividends and the retained profits at the start of the month are -6573. How do I calculate income tax for that year, assuming we are taking into account the previous net losses? Best answer:

Answer by ed
Can not tell you about Australia.In the U.S., losses are carried forward. Any profits will offest those losses.If the profits exceed the losses with a net gain, only then will there be a tax obligation.The losses will carry forward until a net profit is realized, even from one year to the next.

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