DEFINITION of Tax Loss Carryforward
Tax Loss Carryforward means a technique used in accounting that allows to net operating losses to future profits in order to reduce tax liabilities. Loss carryforwards can be used in any one of the seven years following the loss. If a company has a loss in the current year but positive net operating income in one of the next two to seven years, the company can reduce its tax for those years.
Additional meaning of Tax Loss Carryforward:
Investors are also allowed to carry forward their losses resulting from selling shares, so they can reduce tax on future capital gains.