Tax Loss Carryforward

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Dictionary Says

Definition of 'Tax Loss Carryforward'

A tax loss carryforward takes place where a business or individual reports losses on a tax return up to seven years after the loss occurred. Frequently the logic behind this is to reduce tax liability during a year where the income or profits are high if losses were experienced previously. The tax loss carryforward reduces the overall tax liability during the high-earning year by incorporating the earlier loss as a reduction to taxable income.
Investopedia Says

Investopedia explains 'Tax Loss Carryforward'

A tax loss carryforward is a legal means of rearranging earnings to the benefit of the taxpayer. A risk in a tax loss carryforward is that the high-earning year never comes in time to take advantage of the earlier loss.

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'Tax Loss Carryforward'

  • 7 Year-End Tax Planning Strategies

    http://www.investopedia.com/articles/tax/09/offset-capital-gains.asp
    ... Individuals should look at Schedule D of their tax returns in order to ... Individuals
    who have a loss carryforward should still harvest any current losses. ...

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