Carry Back (Verb)
Meaning
Deduct a loss or an unused credit from taxable income for a prior period.
Classification
Verbs of thinking, judging, analyzing, doubting.
Examples
- The company decided to carry back the loss to the previous year's tax return to minimize their tax liability.
- She opted to carry back her unused foreign tax credits to offset the income tax from the previous year.
- Their accountant advised them to carry back the net operating loss to the two preceding years to claim a refund.
- By choosing to carry back the loss, they effectively reduced their taxable income for the prior period.
- If the business elects to carry back the net operating loss, it may reduce its income tax for a previous year.