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Net Operating Loss (NOL) Definition

October 22, 2021

Understanding Net Operating Loss (NOL)

A net operating loss can be carried forward to offset taxable income in future years in order to reduce a company’s future tax liability. The purpose behind this tax provision is to allow some form of tax relief when a company loses money in a tax period. The IRS recognizes that some companies’ business profits are cyclical in nature and not in line with a standard tax year.

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