Carryback


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Carryback

Carryback

In accounting, a way for a company to reduce its tax liability by applying a net operating loss to previous years in which it made a profit. If a company deducts more than its net income in a given tax year, it may take the difference between the deduction and the net income (a negative number) and apply it as a deduction on taxable income for the previous five years. For example, if a company makes $1,000,000 in one year, and loses $500,000 the following year, it may only be liable for a $500,000 profit on the year it makes a profit. That is, it may receive a tax refund on part of what it paid for the profitable year. See also: Future Income Tax.

carryback

A business operating loss that, for tax purposes, may be deducted for a certain number of prior years, usually no more than three. A business uses a carryback to recover taxes paid on income earned in prior years. For example, if a firm experiences a year of large losses following a period of profitable operations, it may use the losses to cancel out profits from preceding years on which taxes have been paid. When the taxes a company paid on profits are canceled because of a carryback, the firm is issued a refund by the Internal Revenue Service. Also called carryover, tax loss carryback.
References in periodicals archive ?
An offset mounting tube allows the blade to angle up and into the belt to remove carryback and as mechanical splices come by the belt cleaner the offset cam allows the mounting tube and blades to move downward away from the belt, therefore improving the life of the belt cleaner blades while not damaging or bending the mounting tubes.
Reevaluate the dollar ranges for the NOL carryback priority codes to verify that they accomplish their intended purpose;
The final step for the Greens is to see if any loss remains to be carried to other years following the carryback to 2008.
The current carryback and carry forward periods were (apart from a previous temporary provision) set by the Taxpayer Relief Act of 1997, not for any policy reason but simply as a budgeting device.
The tax loss carryback provision is a morsel of the roughly $145-billion economic stimulus plan being negotiated by the administration and Congress, which would include rebates of several hundred dollars for individuals and couples, and so-called bonus depreciation to allow companies to deduct 50 percent of business investments they make this year.
If original return included an election to forego carryback
A provision of the new law temporarily extends the general NOL carryback provision to five years (from two years) for NOLs arising in taxable years ending in 2001 or 2002.
Martin Washbox Cleaning System operators concerned with the amount of moisture remaining on the belt have the option of adding a squeegee roller, which has proven to effectively address wet carryback.
VR said its heated bodies were installed on two Cat 789 haulers during 2015 at two different mines, with exceptional results: carryback problems on both trucks were completely eliminated.
1,2014, the carryback amount may not exceed 50 percent of the NOL.
If these companies incur a net operating loss (NOL) in 2013 or 2014, the corporate equity reduction transaction (CERT) rules could provide an unpleasant surprise and limit the carryback of NOLs.
The taxpayer may benefit in these circumstances by electing to waive the carryback period.