Net Operating Losses (NOL)
Net Operating Loss (NOL) is the excess of deductible expenses over gross income for a business operation. The excess expense is labeled as NOL and reported this way on the tax return. The firm will not only have no taxable income for the year, but they will also be able to carry the loss back or forward, because the gross income was offset by deductible expenses.

NOL Limitations:
2-year carry back – For most NOL
3-year carry back – For casualty or theft and qualified small business NOL
5-year carry back – Farming NOL
20-year carry forward – For most NOL

NOL deduction should be reported on Schedule A (Form 1045)

Sample Questions 1 - 5

Related Articles
  1. Taxes

    Understanding Net Operating Loss

    Net operating loss is a term from the Internal Revenue Code that refers to a tax situation where tax deductions exceed income.
  2. Taxes

    Here's How to Deduct Your Stock Losses From Your Tax Bill

    Learn the proper procedure for deducting stock investing losses, and get some tips on how to strategically take losses to lower your income tax bill.
  3. Taxes

    How To Calculate AGI For Tax Purposes

    The first step in completing your taxes is calculating your adjusted gross income. Here’s how.
  4. Taxes

    Want A Bigger Tax Refund? Don't Itemize

    Six reasons why many taxpayers can save money and time by claiming the standard deduction.
  5. Financial Advisor

    Top Tips for Deducting Stock Losses

    Investors who know the rules can turn their losing picks into tax savings. Here's how to deduct your stock losses.
  6. Taxes

    Do Your Research Before Claiming These Deductions

    Be sure to read the fine print about any deduction or credit that you’re planning to claim.
  7. Taxes

    Cut Taxes By Reporting Property Damage

    Know the options you have for your insured property if and when a disaster strikes.
  8. Taxes

    10 Tax Benefits for the Self-Employed

    Running your own business has both personal and financial perks.
  9. Taxes

    7 Commonly Overlooked Tax Deductions

    Don't pay more taxes than you have to because you've missed taking legitimate tax deductions. Here are just a few you may have overlooked.
  10. Taxes

    Don't Miss These Insurance-Related Tax Deductions

    Knowing the tax deductions you're entitled to can make or break your bank account. Do you know about all these insurance-related deductions?
Frequently Asked Questions
  1. When Does a Corporation Decide to Refinance Debt?

    Favorable market conditions or the strengthening of a credit rating may lead to corporate refinancing.
  2. What is the difference between an inter vivos trust and a testamentary trust?

    The difference between inter vivos trusts and testamentary trusts.
  3. Who are Target's (TGT) main competitors?

    Learn more about the discount retailer Target and its competitors. Find out some of the things discount retailers do to increase ...
  4. Why would a company issue preference shares instead of common shares?

    Learn about some reasons corporations might issue preference shares and why investors might value them more than common shares.
Trading Center