Nolo's Plain-English Law Dictionary

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Net Operating Loss (Nol)
An annual net loss from a business operation. An NOL may be used to offset the income of unincorporated business owners from other sources of income in the year of the loss. An NOL may also be carried back two years to reduce tax liabilities or secure refunds of taxes. (See also: carryover)
LA-NOLO3:DRU.1.6.3.6.20141124.29342