Which statement about the California suspension of net operating loss (NOL) carryover deduction is incorrect?

The chosen response is valid because the suspension of the net operating loss (NOL) carryover deduction in California does indeed apply to individuals, as well as business entities. Under certain conditions, individual taxpayers can experience a suspension of their NOL deductions, particularly if their NOL exceeds designated thresholds or due to other tax policy changes. Recognizing that this suspension includes both individuals and businesses clarifies the broader scope of the regulation.

The context surrounding the other statements helps further illuminate the correct choice. For instance, disaster loss carryovers being affected by the NOL suspension suggests that even specific, indefinitely recognized losses still face limitations under this guideline, contradicting the notion that all losses can be carried forward without concern. Also, understanding that the suspension mainly targets larger NOLs aids in delineating the threshold for individual taxpayers, implying that if their NOL is under the specified limit (like $1 million), they maintain eligibility for deductions without the same restrictions that apply to higher NOLs. Lastly, the concept that NOL carryover is unlimited for individuals alludes to a misunderstanding, as the suspension effectively changes how these losses can be treated, particularly during certain tax periods.