Business & farm

You can tell the difference between an NOL and At-Risk limitation.

What is a Net Operating Loss?

A net operating loss (NOL) results from the situation in which a business or individual has more allowable tax deductions than it has taxable income. In this case, the business has negative income, or a net operating loss. That's the bad news. But the good news is that you may be able to take that net operating loss and move it to a tax year in which you had a profit (actually, net operating income) in future years.

To have an NOL, your loss must generally be caused by deductions due to expenses from: 

• A business (but see restrictions on losses depending on types of business below)
• Losses due to casualties or theft
• Moving expenses, or
• Rental property.  

You will get this screen in your program.