Carryback

(redirected from Loss 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 ?
This is due to net adjustments of $212,872 resulting primarily from the Federal income tax benefit of a net operating loss carryback recorded in the fourth quarter of 2003, which also increased fourth quarter net income to $499,977 or $.
Will the Budget include the repeal of the alternative minimum tax, an extension of the net operating loss carryback provision, or bonus depreciation?
6411 (a) allows tentative carryback adjustments of the tax for tax years affected by a net operating loss (NOL), a business credit carryback, or a capital loss carryback.
In the second case, home-products company Electrolux claimed a special exception to section 6511(a) in subsection (d)(2)(A), which allows refunds arising from a net capital loss carryback that are claimed within three years from the time for filing a return for the tax year in which the loss occurred.
The face of the form and the related instructions state that whenever a loss carryback releases foreign tax credits (FTCs), the taxpayer is precluded from filing a Form 1139.
280H(e), a net operating loss carryback is not allowed while a Sec.
Enlarges the net operating loss carryback period from two years to five and waives alternative minimum tax depreciation.
Expand the Net Operating Loss Carryback Period to Five Years
The state Supreme Court held (38) that the taxpayer could not subtract a nonbusiness capital gain that had already been completely offset by a capital loss carryback in calculating the "Federal taxable income" starting point.
The loss carryback provision enables companies to obtain tax refunds -- providing a vital infusion of cash to preserve a company and related employee jobs -- at a time when a downturn in the business cycle might otherwise jeopardize the company's continued viability.
received a tentative allowance (without interest) for 1996 stemming from a 2001 net operating loss carryback.
Kalkbrenner noted, "During the quarter, we created a REIT which enabled us to recognize a capital loss carryback that resulted in a one-time net tax expense benefit of $11.