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AVVH $30.9 Million Tax NOL Significance...

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stervc Member Level  Sunday, 05/23/21 02:18:53 PM
Re: TOUCAN post# 16425
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AVVH $30.9 Million Tax NOL Significance...

I must admit that AVVH having a Tax Net Operating Loss (NOL) of $30.9 Million had gotten by me. This is huge as this makes AVVH the perfect acquisition/merger candidate for Gold Quest Corp to come into since it lends $500 Million+ Annually:
Quote:

AVVH/Gold Quest Group lends $500 Million+ Annually
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=163608153

https://backend.otcmarkets.com/otcapi/company/financial-report/275221/content



Some see that a Tax NOL is synonymous to an Accumulated Deficit for being an accumulation of losses since inception. That could be the case, but actually, an Accumulated Deficit is not necessarily equal to the Tax NOL, but the Tax NOL is derived from the Accumulated Deficit. Yes, Net Operating Losses (NOLs) are available for tax purposes, but those loses are derived from Accounting Losses. Heck, everything in relation to a public company evolves around the Accounting. The single most important thing to know about a Tax NOL is that... a Tax NOL will offset the pre-tax income or Revenues.

The one thing that we do have to keep in mind is that the total amount for the Tax NOL might not be the entire $30.9 Million for one year as that would be the best-case scenario. This is because Congress enacted a code through Section 382 within the IRS Code where it was modified to limit the losses of a corporation ability to carry forward and set off NOLs if an ownership change has occurred.

AVVH did have a change in control of ownership. This means that even though they have the full allowance of the $30.9 Million, they will only be able to use an insignificant amount against future taxable income. This is still huge because the $30.9 Million is available to be used as a 2 year carry back and 20 year carry forward Tax Net Operating Loss (NOL) to reduce the taxable income for the company’s future tax years. This is still huge because even a worst case scenario, for an insignificant amount, would be to implement the 20 year carry forward which with using all of the $30.9 Million Allowance. Still, that equates to over $1.5 Million per year to be allowed to go towards reducing taxable income for the company’s future tax years.

Below are some good links and videos to listen and understand the logic regarding Net Operating Losses (NOL):

http://www.investopedia.com/video/play/net-operating-loss-nol/?ad=dirN&qo=serpSearchTopBox&qsrc=1&o=40186

http://www.investopedia.com/terms/l/losscarryforward.asp

Net Operating Losses (NOLs) on the 3 Financial Statements
https://www.youtube.com/watch?v=p_53cPDNxCQ


Quote:

http://www.investopedia.com/terms/n/netoperatingloss.asp
NOL carryforwards are recorded as an asset on the company's general ledger. They offer a benefit to the company in the form of future tax liability savings. A deferred tax asset is created for the NOL carryforward, which is offset against net income in future years. The deferred tax asset account is drawn down each year, not to exceed 80% of net income in any one of the subsequent years, until the balance is exhausted.


v/r
Sterling


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I never give investing advice; only my beliefs for risks in a stock.
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