Carryback

(redirected from Loss Carryovers)
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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 ?
* Did the taxpayers have a short-term and/or a long-term capital loss carryover into the current year?
Passive loss carryovers could convert lo net operating losses--but only under specific circumstances.
A practitioner who is aware that a married taxpayer is in failing health should look for opportunities for the taxpayer to sell assets generating capital gain income to offset capital loss carryovers. After the taxpayer dies, the spouse can continue to generate capital gain income during the remainder of the tax year to offset the decedent's capital loss carryovers.
Example 5: Erica Foster has a total of $120,000 in loss carryovers, mainly from 2000 and 2008.
tax return loss carryovers, common sources of misclassification errors, and the effectiveness of alternative data screens.
Generally, under Tax Act 2001, property acquired from a decedent after December 31, 2009, can be stepped up in basis by $1,300,000, assuming there are no built in losses or loss carryovers, for transfers to non spousal beneficiaries.
In 1999, the IRS released final regulations providing relief where both the separate return limitation year (SRLY) rules and section 382 apply to limit the use of net operating or capital loss carryovers. We encourage the government to issue similar remedial relief where the SRLY rules overlap with section 384 thereby limiting the use of credit carry-overs.
The plot thickened when Moinian, who was in love with the deal, agreed to their Fortune Counter's scheme to transfer the Biltmore into another family company that had loss carryovers, thereby balancing out the audience gains.
Many issues remain as to basis, suspended losses, or loss carryovers, to name a few.
The surviving spouse could sell his or her own properties at a gain to use the deceased spouse's capital loss carryovers that would otherwise expire, or the surviving spouse could take an IRA distribution and offset that income with the deceased spouse's NOL carryovers.
Under the programme, the approved biotechnology companies can sell their unused Net Operating Loss Carryovers (NOLs) and unused Research and Development (R&D) Tax Credits for at least 80% of the value of the tax benefits to unaffiliated, profitable corporate taxpayers in the State of New Jersey.
The company said the programme enables approved, unprofitable New Jersey-based technology and biotechnology businesses to sell their unused net operating loss carryovers and unused research and development tax credits to unaffiliated, profitable corporate taxpayers in New Jersey for at least 80% of the value of the tax benefits.