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 bill sets rules for calculating loss carry-overs, deferred deductions and deferred income.
With the exception of "The Others" (and 2000 carry-overs such as "Crouching Tiger, Hidden Dragon"), few true sleepers have emerged.
Singh won 90,000 Canadian dollars (pounds 41,000) by sinking a six-foot putt to win the ninth, the result of four carry-overs, while Garcia collected one skin worth 15,000 dollars (pounds 6,800).
having cleared their carry-overs, are suddenly looking for stock.
7 billion in 2012 before gap-closing measures and prior-year carry-overs.
In the future, with a low budget, we should try carry-overs," pleads the budget commissioner, who sees such flexibility as "a rescue device".
are carry-overs or extensions of long-term goals already being worked on, like strengthening the town's fiscal policies.
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.
The operational data from the regions, as of March 11th, 2016, agricultural enterprises have available, taking into account the carry-overs, 843 thousand tons of nutrients mineral fertilizers accounting for 89% of the requested amount (in 2015 this figure was 88%), including nitrogen fertilizers 613 thousand tons or 91%, phosphate fertilizers 133 thousand tons or 87%, potassium fertilizers 97 thousand tons or 82%, generally, similar to the level of availability in the previous year.