loophole

noun

loop·hole | \ ˈlüp-ˌhōl

Definition of loophole

(Entry 1 of 2)

1a : a small opening through which small arms may be fired

b : a similar opening to admit light and air or to permit observation

2 : a means of escape especially : an ambiguity or omission in the text through which the intent of a statute, contract, or obligation may be evaded

loophole

verb

loopholed; loopholing; loopholes

Definition of loophole (Entry 2 of 2)

transitive verb

: to make loopholes in

Examples of loophole in a Sentence

Noun

She took advantage of a loophole in the tax law. His attorney has been hunting for a loophole that would allow him to get out of the deal. tried to close a loophole in the new legislation

Recent Examples on the Web: Noun

DeWine’s budget plan sought to close the loophole, the House removed that language, and now the Senate wants to add DeWine’s language back into the final bill. — Jeremy Pelzer, cleveland.com, "Ohio’s anti-abortion ‘heartbeat’ law blocked by federal judge: Capitol Letter," 4 July 2019 And even that did not rectify the disparity, because many women of color, disenfranchised through various loopholes, had to continue to fight for voting rights. — David Kindy, Smithsonian, "The Voting Machine That Displayed Different Ballots Based on Your Sex," 26 June 2019 The rights loophole that allowed MGM to remake the 1988 version of the film only extends to that, the original, and can't infringe on the rest of the still ongoing franchise. — Rosie Knight, The Hollywood Reporter, "How 'Child's Play' Sets Up a Sci-Fi Sequel," 22 June 2019 To justify this loophole, bin Laden invoked the writings of medieval Muslim scholars such as al-Qurtubi. — Mohammad Hassan Khalil, The Conversation, "So, what really is jihad?," 20 June 2019 In 2009, president Obama signed the Lily Ledbetter Fair Pay Act, an amendment to the Equal Pay Act, to correct the loophole that allowed the Supreme Court to rule against her two years earlier. — Beth Dreher, Good Housekeeping, "What Is the Gender Wage Gap?," 12 June 2019 The loophole for discrimination would include religious or moral beliefs. — Alexis Jones, Marie Claire, "Taylor Swift Donated More Than $100k to Fight These Disgusting Anti-LGBTQ Bills," 9 Apr. 2019 The carbon dating regulation, first proposed in 2017, is meant to close some of those loopholes. — Rachel Nuwer, National Geographic, "Japan's new rules for curbing ivory trade won't work, many experts say," 8 Apr. 2019 China isn’t turning away everyone’s plastic—and in the loopholes, its former plastic partners may find a way to continue to recycle their waste overseas. — Ellen Airhart, WIRED, "China Won’t Solve the World’s Plastics Problem Any More," 20 June 2018

Recent Examples on the Web: Verb

State Assembly 1507, for instance, would close the out-of-district charters loophole and forbid charter schools from opening such satellite locations. — San Diego Union-Tribune, "Some small school districts profit from charter schools," 9 June 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'loophole.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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Dictionary Entries near loophole

Statistics for loophole

Last Updated

18 Jul 2019

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Time Traveler for loophole

The first known use of loophole was in 1591

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More Definitions for loophole

loophole

noun

Financial Definition of loophole

What It Is

A loophole is an exception that allows a system to be circumvented or avoided. It usually refers to legal, taxation, or security strategies that are exploited for personal gain.

How It Works

Loopholes are failures of a system to account for all conditions, variables, or exceptions. To illustrate a legal loophole, consider a local development law that requires even an unoccupied building to pay real estate taxes so long as it receives a certificate of completion. In order to avoid paying taxes, a builder may exploit this loophole and choose not to "complete" the building.

An example of a tax loophole is the tax break for small businesses who invest in "heavy vehicles". The tax break applies if the vehicle is used at least 50% of the time for the business. Business owners may exploit this loophole by upgrading their own vehicles to SUVs, which are considered "heavy" under the tax law, and thereby gain a personal financial advantage.

In most instances, loopholes that lead to excessive abuse are corrected by subsequent regulations and laws.

Why It Matters

While loopholes may save money or allow a purchase that would otherwise not be economical, the use of loopholes is considered questionable. Exploiting loopholes may lead to intensive scrutiny and audits, or even just a feeling of bad faith. For example, a tax payer should be aware when a tax consultant advises of specific tax advantage of whether the advantage is claimed on the basis of an allowable deduction or a loophole.

Source: Investing Answers

loophole

noun