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Simple English definitions for legal terms

net operating loss (NOL)

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A quick definition of net operating loss (NOL):

Net operating loss (NOL): When a company spends more money than it makes in a year, it's called a net operating loss. This means the company can deduct that loss from its taxes in future years to help reduce its tax bill. However, there are limits to how much can be deducted.

A more thorough explanation:

A net operating loss (NOL) occurs when a company's expenses are greater than its income for a given year. This means that the company has a negative taxable income. The Internal Revenue Code defines NOL as "the excess of the deductions allowed by this chapter over the gross income."

For example, if a company has $100,000 in expenses and only $80,000 in revenue, it would have a net operating loss of $20,000.

When a company has an NOL, it can use it to offset its taxable income in other years. This is called a carryback or carryover. For instance, if a company has an NOL of $20,000 in year one and a taxable income of $50,000 in year two, it can use the NOL to reduce its taxable income to $30,000.

However, there are limits to how much of the NOL can be used in a given year. The deduction is limited to 80% of taxable income.

Overall, an NOL can be a helpful tool for companies that experience a loss in a given year. It allows them to reduce their tax liability in future years and potentially improve their financial situation.

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JumpySubsequentDolphin
21:35
no he’s literally like 8 and he fully just put his head on my bicep and slept
JumpySubsequentDolphin
21:35
he has since moved
22:12
@SplitterusClitterus: me yesterday
gulc baby pls text me back... i miss you ...... :(
22:23
i just went into a discord vc and yelled "YALL I JUST GOT INTO J.M. SCHOOL OF LAW"
22:24
people were getting excited :sob:
22:25
then someone was like "what does jm stand for" and i was like .. well
AHHAHAHAHAHAHHAHAHAHAHAHAH
@JumpySubsequentDolphin: wait this is so cute, also where r u going
JOE MBIDEN
JumpySubsequentDolphin
22:39
@splitty Oregon!
oh yay for what thats so random
JumpySubsequentDolphin
22:45
haha my brother and sister in law live there
so cutie oregon is beatiful
soyalmondoatmilk
8:38
good morning! hoping waves will come our wave today
8:42
GW wave today?
8:57
There’s someone I found on here with the username threeoutchange and if my understanding is correct that’s a reference to the debut album by a pretty cool 90s-00s Japanese band called Supercar. I geeked a little
8:57
It could just be a baseball reference I don’t get though lol
Dkk
9:00
@renard99: also, the same band that does a song in the anime Eureka 7 which I watched when I was like idk, 12
9:00
Yeah! They are pretty good. Three Out Change is an awesome J-rock record
Dkk
9:01
I will probably not listen to them more but fun fact. Really random to start the day. An omen that the waves will be very random today.
Dkk
9:03
Fuck, reading the wikipedia now. Literal last song they did before they broke up was Storywriter. Wow.
9:05
That one is a masterpiece
9:05
My favorite song by them is Recreation
glovediedthisishismom
9:05
snowing
Dkk
9:07
@renard99: man, hard to find.
Dkk
9:07
@glovediedthisishismom: Congrats on the snow.
Dkk
9:16
@renard99: Poetic and nice.
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