I'm shocked, I tell you, to learn that if someone loses $100,000 one year and gains $100,000 the next, the income tax law treats that as though he made nothing in either year. The magic January 1 date is temporarily ignored and the two years net against each other in one big two-year income result that equals zero. That means you pay no tax for one of those years even though on paper you made big bux in that 12-month period. We generally expect an organization like the IRS to play by "heads I win, tails you lose" rules, but in this case the rules are what you might call rational and fair.
This net-operating-loss write-off is known as a kind of "deduction," and deductions are actually available to all of us. Many of us ordinary people have used a "tax avoidance" technique of one kind or another, such as the mortgage deduction. I'll bet you didn't know that, not only is it not illegal, it's not even wrong!
From Althouse:
It's unAmerican to use the phrase "get away with" to refer to following the law. It's like accusing me of speeding when I'm going 75 in a 75 mph zone. I'm not "getting away with" it. I'm going the speed limit! Change the speed limit if that's the wrong top speed. Crimes are the things that have been defined as crimes. It's particularly irksome for a legislator to talk like that — shifting the blame for the legislature's own failures.