Definition, Meaning & Synonyms
carry-back
noun
/ˈkæri bæk/
Definition
The act of applying a tax loss to a previous tax period to offset taxable income.
Examples
- After filing for bankruptcy, the company utilized a carry-back to recover some of the taxes paid in previous years.
- By claiming a carry-back, the investor was able to receive a refund from the IRS for the taxes owed on profits from earlier investments.
Meaning
Carry-back is a tax provision allowing individuals or businesses to use a current year’s loss to reduce income in a prior year, resulting in a tax refund for taxes paid in that previous period.
Synonyms
- tax loss carry-back
- tax credit
