Accounting Dictionary
Net Operating Loss (NOL)
A net operating loss is limited substantially to a net loss incurred in the operation of a trade or business, although a casualty loss or a loss from a sale of a business asset is included within its scope. A net operating loss may be carried back two years against the income of those two years to the earliest year first. Any unused portion of such loss may be carried forward past the taxable year for 20 years.