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 ?
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.
It may make sense to use loss carryovers as soon as possible.
Any net operating loss for the taxable year of the discharge, and any net operating loss carryover to such taxable year, are the first attributes that have to be reduced.
Therefore, firms with loss carryovers exercise their real options earlier because they have higher waiting costs, which in turn implies that the value of the real option from Equation (20) (i.
This article reviews the tax consequences to the owner of a second home, with special attention being paid to the loss carryovers.
If an investor has a bank of capital loss carryovers, rebalancing can be less taxing.
Critical care focused company CytoSorbents Corporation (OTC BB :CTSO) reported on Tuesday the receipt of USD391,562 from the sale of its prior unused net operating loss carryovers under the Technology Business Tax Certificate Transfer Programme.
3 million (plus the amount of the decedent's unused capital loss carryovers, net operating loss carryovers and built-in losses) to increase certain assets' basis to their FMV at death (basis increase) (see "Estate Tax or Carryover Basis?
However, investors with capital loss carryovers, excess investment interest or other unused deductions may benefit from a fund with a high turnover rate more likely to generate higher current taxable income.
In April, TEI urged the IRS to eliminate the overlap between the SRLY consolidated return rules and the section 382 limitation on loss carryovers.
This income can be completely offset by utilizing portions of the passive loss carryovers from Properties B, C and E.
If cancellation-of-debt income is excluded from taxation, then starting in the year after the cancellation occurred the debtor must reduce any remaining tax loss carryovers, tax credits and the tax cost of depreciable property to the extent of the excluded income.