Loss Carryback

An accounting technique with which a company retroactively applies net operating losses to a preceding year's income in order to reduce tax liabilities present in that previous year.

Loss carrybacks are similar to loss carryforwards, except companies apply their net operating losses to preceding rather than subsequent years' incomes. GAAP stipulates that a loss carryback can be applied only to the three years preceding the loss. For instance if a company were to record a net operating loss in year five, the company could apply a loss carryback to any of years two to four.


Investment dictionary. . 2012.

Look at other dictionaries:

  • tax loss carryback — tax loss carryback, carryforward A provision in the Internal Revenue Code which allows an individual or corporation to apply current year losses against prior or subsequent year income to reduce their tax liability …   Black's law dictionary

  • tax loss carryback, carryforward — A provision in the Internal Revenue Code which allows an individual or corporation to apply current year losses against prior or subsequent year income to reduce their tax liability …   Black's law dictionary

  • tax loss carryback, carryforward — A tax benefit that allows business losses to be used to reduce tax liability in previous and or following years. Bloomberg Financial Dictionary …   Financial and business terms

  • carryback — car·ry·back / kar ē ˌbak/ n: the portion of an income tax deduction (as for a net operating loss) or credit which cannot be taken entirely in a given period and which may be deducted from taxable income of a prior period compare carryover Merriam …   Law dictionary

  • carryback — car‧ry‧back [ˈkæribæk] noun [countable, uncountable] ACCOUNTING TAX when an amount of money earned or spent in a particular year is included in the accounts for an earlier year: • A carryback was introduced for BES investors, enabling them to… …   Financial and business terms

  • loss — n 1: physical, emotional, or esp. economic harm or damage sustained: as a: decrease in value, capital, or amount compare gain b: an amount by which the cost of something (as goods or services) exceeds the selling price compare …   Law dictionary

  • carryback — noun Date: 1942 a loss sustained or a portion of a credit not used in a given period that may be deducted from taxable income of a prior period …   New Collegiate Dictionary

  • carryback — /kar ee bak /, n. (in U.S. income tax law) a special provision allowing part of a net loss or of an unused credit in a given year to be apportioned over one or two preceding years, chiefly in order to ease the tax burden. Cf. carryforward (def.… …   Universalium

  • carryback — noun A income tax loss or credit that can be applied to offset previously taxed income or taxes paid, respectively …   Wiktionary

  • carryback — An income tax law term for applying a net operating loss for one year in the recomputation of tax for an earlier year. 9 ALR2d 352, Later Case Service …   Ballentine's law dictionary

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