Carryover Legal Meaning and Definition

Here is a simplified definition of the legal term Carryover.

Carryover (n): This term refers to the method where losses, expenses, or allowable deductions from a specific year are forwarded or "carried over" into the next year. These can then be used to offset future profits, helping to lower the entity's taxable income and subsequently, its tax obligation, when it starts making taxable profit again.