Net Operating Loss
/ˈnɛt ˈɒpəreɪtɪŋ lɒs/
Definitions
- (n.) The amount by which a taxpayer's business deductions exceed gross income, often used to offset taxable income in other years.
The company reported a net operating loss of $2 million, which it carried forward to reduce tax liability in subsequent years.
Forms
- net operating loss
- net operating losses
Related terms
See also
Commentary
Commonly used in tax law, net operating loss allows businesses to smooth income tax burdens across profitable and unprofitable years.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.