What Is A Net Operating Loss (NOL)?

Patrick Curtis

Reviewed by

Patrick Curtis WSO Editorial Board

Expertise: Investment Banking | Private Equity

A Net Operating Loss or NOL is a period of time during which the tax-deductible expenses of a company are greater that the total income of the company. This means that the company is essentially operating at a loss and is therefore required to pay less tax.

In order to remain fair, companies are taxed when they are profitable and should therefore receive tax money back when they are unprofitable. This happens in the US in the form of NOL tax relief. When a company posts a net operating loss, they can either claim tax credits back from previous amounts of tax they have paid, or they can use the loss to offset future tax liabilities.

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Patrick Curtis

Patrick Curtis is a member of WSO Editorial Board which helps ensure the accuracy of content across top articles on Wall Street Oasis. He has experience in investment banking at Rothschild and private equity at Tailwind Capital along with an MBA from the Wharton School of Business. He is also the founder and current CEO of Wall Street Oasis. This content was originally created by member WallStreetOasis.com and has evolved with the help of our mentors.