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Definition of "Set-off"

Nick Potts & Sandy Daul
  The Keyes Company

  1. Taxation: Offsetting an amount you owe the government in taxes against what the government owes you in taxes. For example, you can reduce your tax liability by a carry forward loss.
  2. Law: Defendant in an action counterclaims an amount the plaintiff owes him so as to reduce the possible recovery for the plaintiff. For example, if the plaintiff is suing for $100,000 in damages the defendant may try to reduce that amount by $25,000 by arguing that the plaintiff has wronged the defendant in some other way.

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