Net Operating Losses (LO 4.9) Tyler, a single taxpayer, generates business income of $3,000 in 2016. In 2017, he generates an NOL of $2,000. In 2018 , he incurs another NOL of $5,000. In 2019, he generates a modest business income of $6,000 and then In 2020 , the COVID-19 pandemic results in an NOL of $13,000. In 2021, Tyler's business generates Income of $13,000. Assume that in all years, Tyler adopts the NOL treatment that results in the earliest and greatest refund. Provide a chronological analysis of Tyler's treatment of NOLs through 2021 and report any NOL carryforward Into 2022. In 2017, Tyler carries back his $2,000NOL against his 2016 income leaving $1000 of 2016 income. In 2018, Tyler carries forward the NOL to 2019. In 2019, Tyler can offset 80% of his 2019 income with the 2018 NOL and he has a $200 carryforward from 2018. In 2020, the COVID-19 provisions allows him to carryback $1,000 to 2016. He can now use all of the remaining $2002018 loss against the 2019 income and then can use another $1,000 of 2020 NOL against the remaining 2019 income. The remaining $ fill in the blank NOL from 2020 may be carrled forward into 2021. After 2020 , NOLs are subject to the 80% income limitation. Tyler will be able to use $10,400 in 2021 and have a $ fill in the blank NOL to carryforward into 2022. Foedback The net operating loss provision is primarliy designed to provide rellef for trade or business losses. Generally, only losses from the operation of a trade or business, casualty and thett losses, or confiscation losses can generate a net operating loss. The rules related to NOLs have changed three times in recent years and with each change, NOLs are treated silightly differently. The three periods are: (1) the Pre-2018 period, (2) the 2018-2020 period (due to COVID-19 provisions), and (3) the post-2020 period, In the pre-2018 period, NOLs were eligible to be carried back two years and forward for 20 years. Any NOL carryforward or carryback could be used to offset 100 percent of the income generated in the carryback or forward perlod. NOLs generated in this period can continue to be utilized in the same manner