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 ?
The trio pool would be carried over 40 per cent of the time, and most `players', of which your correspondent was one, stepped in when there was a carry-over of over pounds 25.
Canadian Mike Weir, who missed the cut at the British Open, won 45,000 dollars (pounds 20,500) on the fourth after two carry-overs.
7 billion in 2012 before gap-closing measures and prior-year carry-overs.
are carry-overs or extensions of long-term goals already being worked on, like strengthening the town's fiscal policies.
FundTax Pro also includes the same functionality offered by FundTax, a GainsKeeper tool that completes tracking of wash sale deferrals and reversals, holding period carry-overs and basis adjustments.
Brough Park and Belle Vue are both taking big carry-overs from Saturday into tonight's fixtures and five-figure pots look certain to result.
Generally, the DLF can be expressed as the excess of a subsidiary's loss carry-overs and aggregate adjusted basis in its assets, over the value of its stock (plus any liabilities) immediately after the disposition of its stock by a consolidated group member (Regs.