capital loss


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Capital loss

The difference between the net cost of a security and the sales price, if the security is sold at a loss. Also used in a more general context to refer to the market for stocks, bonds, derivatives and other investments.

Capital Loss

In real estate and investments, the difference between the purchase price and the sale price when the sale price is less. That is, when an investor buys a security or real estate and sells it for a lower price, he/she incurs a capital loss. One may use capital losses to offset capital gains to minimize one's liability for capital gains taxes; indeed, some investors do so deliberately. See also: Paper loss.

capital loss

The amount by which the cost basis of a capital asset exceeds the proceeds from its sale.

Capital loss.

When you sell an asset for less than you paid for it, the difference between the two prices is your capital loss.

For example, if you buy 100 shares of stock at $30 a share and sell when the price has dropped to $20 a share, you will realize a capital loss of $10 a share, or $1,000.

Although nobody wants to lose money on an investment, there is a silver lining. You can use capital losses to offset capital gains in computing your income tax. However, you must use short-term losses to offset short-term gains and long-term losses to offset long-term gains.

If you have a net capital loss in any year -- that is, your losses exceed your gains -- you can usually deduct up to $3,000 of this amount from regular income on your tax return. You may also be able to carry forward net capital losses and deduct on future tax returns.

capital loss

the deficit realized when an ASSET (house, SHARE, etc.) is sold at a lower price than was originally paid for it. Compare CAPITAL GAIN.

capital loss

the deficit realized when an ASSET (house, SHARE, etc.) is sold at a lower price than was originally paid for it. Compare CAPITAL GAIN.

capital loss

A loss recognized upon the sale of a capital asset.It is the difference between the sale price of the property and the adjusted basis.Just like capital gains,capital losses can be either short term or long term. Long-term capital losses may be set off against long-term capital gains. Short-term capital losses may be set off against short-term capital gains; one may not recognize a capital loss on the sale of a personal residence.

Capital Loss

The loss from the sale or exchange of a capital asset. Up to $3,000 ($1,500 if married and filing a separate return) of net capital loss is deductible annually with the excess carried forward to future years. Losses on personal-use assets are not deductible.
References in periodicals archive ?
In the example, P (1) used the $10,000 capital loss that it could not use to reduce gain in either prior or future tax years; (2) did not have to pay the excise tax from the Z stock sale, because the T stock $10,000 capital loss reduced the gain on Z to zero; and (3) put itself in a better position with the repurchased 50 Z shares, because that increased its basis in those shares to $10,000, without incurring excise tax.
ABILs are losses that may occur where your small business corporation, or one you invest in, falls on hard times and you suffer a capital loss on shares or debt.
Taxpayers who invested before the fraud occured received capital loss treatment, whereas those investing afterward had a theft loss.
Since the AMT applies only when it is greater than the regular tax, it is unlikely the taxpayer will ever receive any tax benefit due to the AMT capital loss carryforward.
If the election is not made, and the bankruptcy estate has assets to administer, causing it to remain open through 2006, the debtor will not be able to use the capital loss carryover on the 2005 full-year return and a greater capital loss would be available to the bankruptcy estate.
Only 50 percent of a capital gain or capital loss is recognized in calculating income, and capital losses are only allowed as an offset against capital gains.
1) (For purposes of this provision, the character of the losses--short term or long term--does not matter: Any net capital loss can be used to offset up to S3,000 of ordinary income.
Section 165(c)(2) theft loss deductions can be more advantageous than capital loss ones for the following reasons:
If there are no capital gains, or if the capital losses are larger than the capital gains, the capital loss can be deducted against other income, limited to $3,000 in one year.
applying the economic-substance doctrine to disallow a large capital loss.
Positive adjustments include capital loss carryovers and carrybacks, the net operating loss deduction, and the dividends-received deduction.
In addition, "over accrual" can arise under the FIE Rules, as a capital loss on disposition of a FIE interest may be of limited use because of ring fencing (if the taxpayer does not have sufficient capital gains to use such losses) and because the Act only permits 50 percent of capital losses to be recognized.