Net Operating Loss

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Operating Loss

The state in which a company's operating expenses exceed its income for a given period of time, usually a quarter or a year. A company can carry back or carry forward operating losses for a certain number of years, reducing the company's tax liability. This is positive, but an operating loss still means that the company is losing money, which cannot be sustained over the long term.

Net Operating Loss (NOL)

A NOL is the net loss for the year attributable to business or casualty losses. Depending on the nature of the loss, it may be carried back for two, three, or five years before the year of the loss. The loss is subtracted from the income reported on the return and the unused loss can be carried forward for up to 20 years.
References in periodicals archive ?
The net operating loss carryforward and carryback provisions of section 172 permit taxpayers to ameliorate the unduly harsh and inequitable consequences of taxing income strictly on an annual basis.
Regulations section 1502-11 requires a consolidated group to determine its consolidated net operating loss as follows.
95 million, with reportable net income in excess of $7 million due to the company's net operating loss carry-forward and the anticipated gains from the sale of Kolar's buildings.
Example: High Tech Company, a start-up company, has incurred substantial research and development costs in its first three years of operation, creating a $300,000 net operating loss carryforward.
The Company also has approximately $256 million in long-term debt, and approximately $52 million of net operating loss carryforwards.
382-6 provides alternative rules for allocating net operating loss or taxable income and net capital loss or gain between the periods ending with and after the ownership change date.
The Company expects that its net operating loss carry-forwards (NOLs) will allow most of its profits and cash to drop to the bottom line.
At the end of 2002, the P group had a $50 million consolidated net operating loss (CNOL); $10 million was attributable to $1 and $40 million to S2.
ISI) (Nasdaq: IFSC) today announced it intends to participate in the State of New Jersey's corporation business tax benefit certificate transfer program (the "Program"), which when effective will allow certain high technology and biotechnology companies to transfer unused New Jersey net operating loss carryovers to other New Jersey corporation business taxpayers.
2) Thus, the example at Paragraph 224 assumes a net operating loss in the current year portends net operating losses in all future years.
Accordingly, the company will be filing an amended 2005 year-end statutory statement, which will result in a revised net operating loss of $8.

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