carryback

(redirected from Loss Carryover)
Also found in: Financial.

carryback

n. in taxation accounting, using a current tax year's deductions, business losses or credits to refigure and amend a previously filed tax return to reduce the tax liability. (See: carryover)

Mentioned in ?
References in periodicals archive ?
In a decision sure to give Pennsylvania legislators and the Department of Revenue indigestion before their big Thanksgiving meals, the Commonwealth Court held that Pennsylvania s net loss carryover (NLC) deduction cap violated Pennsylvania s Uniformity Clause because it resulted in disparate treatment of similarly situated taxpayers based on the size of the business.
Traubenberg added that, although the statute is clear that the section 199 manufacturing deduction cannot create or increase an operating loss, the effect of a loss carryover (or carryback) on the manufacturing deduction for a particular year is uncertain.
The first is the loss carryover resulting from the passive activity rules of Section 469; the second is the loss carryover from the gross income limitation of Section 280A.
For instance, if the debtor sold stock that generated a $100,000 gain in March 2005, and files a Chapter 7 petition in June 2005, and if the debtor had a $120,000 capital loss carryover from 2004, the election would allow the debtor to avoid incurring a post-petition 2005 year tax liability since the short-year election will cause the carryover to be applied against the gain.
This addback will, in many cases, effectively increase the capital loss carryover (as compared to a non-NOL year) because the $3,000 loss was not "used"; see Sec.
Any remaining carryover continues to be treated as a passive loss carryover to subsequent years.
The amendments also clarify the S corporation loss carryover provisions under Illinois Income Tax Act (IITA) Section 207.
It also works well when (1) the taxpayer has assets with little or no appreciation that would cause a tax to be due or (2) the taxpayer can offset the gain generated from an election with a capital loss carryover, a current or past unallowable passive activity loss (PAL) or a net operating loss (NOL) carryover.
Under the current investment adjustment rules (ignoring de facto liquidation issues to make the point) the basis of the S stock would be decreased by $100 for the deficit in earnings and profits and increased by $100 to reflect the $100 loss carryover.
If loss would be disallowed upon disposition of stock of a subsidiary, a common parent may elect to reattribute to itself any portion of a loss carryover attributable to the subsidiary (or lower-tier subsidiary), so long as the amount reattributed does not exceed the amount that would be disallowed if the election were not made (Prop.
Taxpayer A has a $900 net operating loss carryover, taxable income of $200 in the year of change, and a section 382 limitation of $350 per year.