realized loss

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.

realized loss

The amount by which an investment's acquisition cost exceeds the net proceeds from its sale. A realized loss, as opposed to a paper loss, may be used to reduce taxable income. Compare unrealized loss.
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Under the proposed regulations, A would have a realized loss equal to the disappearing basis in the shares redeemed, but would not be able to recognize it until the earlier of the "final inclusion date" or the "accelerated loss inclusion date.
Applying these rules to Example 1 above, A would still recognize $100 dividend income, but would also have a $30 realized loss (A's basis in the redeemed shares), which A could not recognize until the final inclusion date or accelerated loss inclusion date.
Redemptions and disappearing basis
Last year, the stock market decline resulted in a realized loss of $280,000, compared to this year's realized gain of $350,000.
Foundation treasurer's report
This recapture rule would not apply if the sum of all recapture amounts was less than 10% of the realized loss.
Sourcing losses
Thus, a realized loss should be recognized when the position into which the loss is capitalized is disposed of, regardless of whether there is unrecognized gain in the "larger" position.
Post-AJCA straddle rules
If an asset is disposed of for less than book value, a realized loss will be recognized.
The income statement for the year would include only the $10,000 realized loss from the disposal of asset A (the $120,000 book value less the $110,000 abandonment value).
Asset impairment disclosures: will accounting for asset impairment lead to performance impairment?
For a condemnation, the taxpayer does not recognize a realized loss, because the condemnation of a personal-use asset is not deductible.
Maximizing tax-free gain from a sale of a home
For example, a consolidated group that realized a $200 loss on the sale of a subsidiary member that left the group with a $90 net operating loss carryover may have $90 of its realized loss disallowed.
Loss waiver is important for consolidated groups subject to the loss disallowance rule

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