Question

what happens to credits in the comeback or Cary forward Year

Answer 1

Assuming that the question about credits is regarding tax loss. Then only the answer is valid.

A tax loss isn’t necessarily all bad news. If you have tax loss in one year, you might be able to use that loss to offset profits either in past or future years, to minimise taxes for your business in those years.

How can a Tax loss Cary back or Carry Forward be used?

One of them is a tax strategy of carrying business tax losses in one year backward to a previous profitable year or forward to future years which have a tax gain. a tax loss carryback is a provision that allows an individual or a business to use a net operating loss in one year to offset a profit in one or more previous year.

A tax loss carry forward works the same as tax loss carryback carrying the tax loss over to a future year of profit.Losses used for these provision must be net operating losses and not losses on investment.

Businesses can use these provisions against a net operating loss,capital losses in excess of capital gains and certain gains from the sale or exchange of qualified small business stock.

There are many rules and expectations claiming a tax loss carry back and carry forward.