Recognized Loss

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Recognized Loss

In accounting, the sale of an investment or asset for less than the purchase price. Individuals and companies may use recognized losses to offset taxable income from other gains. For example, if a company has $5,000 in capital gains in a given year and $2,500 in recognized losses, its taxable income on the capital gains is only $2,500. Recognized losses can also be applied to future years. For example, if a company has no taxable income in a given year, recognized losses may offset taxes on profits for up to a certain number of years. See also: Future income taxes.
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The commercial insurance market experienced a $5 billion net realized capital loss, or 0.7% of invested assets for 2009, compared to 2008 net realized capital losses of $14.8 billion or 2.1% of invested assets.
A $1.2 billion increase in federal and foreign taxes and a $3.8 billion reduction in net realized capital losses boosted total industry net income by $1.4 billion from the same prior-year period to $18.8 billion.
Q2 NII excludes 29c of realized capital losses. NAV as of June 30, 2019 was $346.8M, or $13.45 per common share, which is 25c per common share lower than the company's NAV as of March 31, and $3.06 per common share lower than the company's NAV as of June 30, 2018.
Realized capital losses reduced revenues by $894 million.
The industry reported a significant decline in statutory earnings and modest realized capital losses that affected net income during the first quarter, despite an overall increase in revenue, the report said.
(the "Investment Adviser") are consistent with the investment advisory and management agreement between the Company and the Investment Adviser (the "Investment Management Agreement"), and are based only on actual Adjusted Realized Capital Gains computed net of all Adjusted Realized Capital Losses and Adjusted Unrealized Capital Depreciation on a cumulative basis from inception through the end of each calendar year as if the entire portfolio was sold at fair value.
In the previous quarter, AIG reported larger-than-expected quarterly net loss of $1.5 per share, which it attributed to realized capital losses and restructuring costs.
* Offsetting capital gains: A critical assumption is that the client will have realized gains to offset; realized capital losses can only offset a small amount of ordinary income each year.
Industry members also had sizable pretax operating gains, net operating gains, realized capital losses, unrealized capital gains, net operating gains and positive net income.
Whereas the deduction of net capital losses is set at a low level, realized capital losses are fully deductible, provided that they are offset by realized capital gains each year.
"With the financial crisis and Great Recession fading into history, insurers' realized capital losses on impaired investments dropped from $13.9 billion in nine-months 2009 to $3.2 billion in nine-months 2010 and $2.5 billion in both nine-months 2011 and nine-months 2012."
In any given tax year, realized capital losses in excess of capital gains are deductible from ordinary income to noncorporate taxpayers up to $3,000.