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 ?
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.
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.
On the expenditure side, the highest difference between the final result and initial budget in 2002 occurred in the Structural Funds (heading 2): despite important carry-overs from 2002 to 2003 some Euro 4.85 billion have not been disbursed, mainly related to the previous programming period.
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.
First, any modified capital gain net income (MCGNI) allocated to each period is offset by any recognized built-in capital losses and any capital loss carry-overs, subject to the Sec.
However, none of the bets placed - many of which took advantage of half-price discount vouchers carried in the Racing Post - had all six winners, meaning there will be carry-overs for both the win and bonus pools.
1.1502-21, the IRS would limit the use of net operating loss carry-overs of a purchased subsidiary in a consolidated return effective for acquisitions after Jan.
I suspect that most people will show little or no interest in the Scoop6 until it builds up into carry-overs (again memories of the Tote Jackpot).