Net operating loss carrybacks


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Net operating loss carrybacks

The application of losses to offset earnings in previous years.

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.
References in periodicals archive ?
1 million related to net operating loss carrybacks.
0 million in income tax benefits resulting from net operating loss carrybacks.
The restatement to the previously reported financial results for 2001 was to the provision for income taxes in order to restate the calculation of the tax benefit attributable to the alternative minimum tax net operating loss carrybacks available for 2001.
2 million income tax benefit due to refunds from net operating loss carrybacks accrued in the quarter.
For 1990 and 1991, C realized operating losses, which B deducted (through net operating loss carrybacks and carryovers).
The utilization of net operating loss carrybacks in the first quarter of last year, along with the cumulative effect of the change in accounting principle, resulted in a net loss for that period of $13.
Even worse, the income tax net operating loss carrybacks require states to refund taxes paid in years preceding economic downturns.
No tax benefit was provided on the pretax losses for fiscal 2000 due to limitations on net operating loss carrybacks and a valuation allowance provided on deferred tax assets due to lack of sufficient assurance that such assets will be realized in future periods.
At June 30, 2002, the Company had fully utilized its net operating loss carrybacks and had approximately $680,000 and $2,647,000 in Federal and California net operating loss carryforwards, respectively, available to offset future taxable income.
There is no income tax benefit in 1996 due to the Company's utilization of net operating loss carrybacks as a result of the 1995 net loss.
Other established collateral agreements require the taxpayer to{l)reduce the basis of assets for purposes of computing depreciation and gain or loss on disposition, (2)waive net operating loss carrybacks and carryforwards and (3)waive bad debt losses or other deductions.
At December 31, 2001, the Company had fully utilized its net operating loss carrybacks and has approximately $3,856,000 and $2,928,000 in Federal and California net operating loss carryforwards, respectively, available to offset future taxable income.
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