Tax Umbrella


DEFINITION of 'Tax Umbrella'

The use by a company of the losses it sustained in previous years to offset taxes on the profits it achieves in future years. Individuals can also use a tax umbrella so that their investment losses in previous years offset their investment gains in future years. A tax umbrella takes advantage of a tax law provision to reduce tax liability.

BREAKING DOWN 'Tax Umbrella'

Businesses and individuals are limited in how much of a loss they can use to offset taxes in any given year. Any loss that is left over can be used to offset taxes on gains in future years. A tax umbrella is also known as a tax loss carryforward.

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  3. Alternative Tax Net Operating Loss ...

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  4. Tax Loss Carryforward

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  5. Umbrella Insurance Policy

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    The common set of accounting principles, standards and procedures ...
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