### Question
How is the term net operating loss defined?


### Answer
The term **net operating loss** is defined in *26 U.S.C. § 172* as the following:

> the excess of the deductions allowed by this chapter over the gross income

#### Citation:
  - *26 U.S.C. § 172*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART VI-ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS**

