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.

  1. Net Operating Income - NOI

    A company's operating income after operating expenses are deducted, ...
  2. Umbrella Personal Liability Policy

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  3. Alternative Tax Net Operating Loss ...

    The excess of deductions allowed over the income recognized for ...
  4. Tax Loss Carryforward

    A tax loss carryforward takes place where a business or individual ...
  5. Umbrella Insurance Policy

    Extra liability insurance coverage that goes beyond the limits ...
  6. After Tax Operating Income - ATOI

    A company's total operating income after taxes. This non-GAAP ...
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