Net operating loss
Under U.S. Federal income tax law, a net operating loss (NOL) occurs when certain tax-deductible expenses exceed taxable revenues for a taxable year. If a taxpayer is taxed during profitable periods without receiving any tax relief (e.g. a refund) during periods of NOLs, an unbalanced tax burden results. Consequently, in some situations, Congress allows taxpayers to use the losses in one year to offset the profits of other years. This provision is achieved through the carryback (as far back as 5 years per section 1211 of the American Recovery and Reinvestment Act of 2009) and carryforward of NOLs.
- Kieso, Weygandt J. and Terry D. Warfield. Fundamentals of Intermediate Accounting, John Wiley & Sons, 2006. p.699 ISBN 0-471-75272-X
- Donaldson, Samual A. Federal Income Taxation of Individuals: Cases, Problems and Materials, ThomsonWest, 2 ed. 2007. p.301 ISBN 978-0-314-17597-7
- See generally 26 U.S.C. § 172.