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24416 Form 1 Net Operating Loss NOL Computation and

24416 Form 1 Net Operating Loss NOL Computation and

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in this video we're going to discuss how to record a net operating loss in financial accounting so when a firm loses money the IRS will allow the firm to take that loss and to use it to offset past or future taxable income so for example if the firm had lost money in either of the prior two years it can carry back the loss to get a refund of the tax that it paid alternatively if a firm can also carry forward the the tax loss to offset any profits in the future so they can go and say okay look we lost $100,000 this year but if we make 50,000 next year we'll be able to offset that we can carry forward the loss and kind of eliminate that tax we would have otherwise had to pay in the future so I want to show you how this works let's say that you run a pet grooming business and you you have a really successful pet grooming business you take care of of cats of dogs of tarantulas people pets their beloved pets and you clean them up make them look beautiful and the tax

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