[kky617]

I am using Roger CPA, and in the textbook, it said,

Net capital loss up to $3,000 against ordinary income.

– Unused carried forward indefinitely

– Corporations get 0 net capital loss. Can carry back 3 yrs and forward 5 yrs. No special tax rate.

I am not sure about the text. In my understanding (please correct me if I am wrong) only INDIVIDUALS can use the net capital loss up to $3,000 against ordinary income, and that if the individuals don’t get to use up the entire portion of net capital loss up to $3,000 to offset the ordinary income, the residual amount can be carried FORWARD indefinitely.

The corporations can carry the capital loss BACK 3 years AND FORWARD 5 years. I am just not sure what it means by “Corporations get 0 net capital loss” in the text.

Please help me understand 🙂

Thank you!

[Anonymous]

@kky617

1. Yes, individuals can deduct up to $3000 for capital losses immediately. If there are remaining losses they can be carried forward. Remember this limited to AGI. example if your AGI is $2000 you cannot take the full $3000. You can take the $2000 and carry the $1000 forward.

2. Corporation on the other hand they don't have the $3,000 deduction. They can only deduct capital losses against capital income. IF NO capital income you cannot deduct the loss. Unused Net Capital Losses convert to Short term capital losses and can be carried back 3 yrs and forward 5 yrs.

[Anonymous]

@kky617

1. Yes, individuals can deduct up to $3000 for capital losses immediately. If there are remaining losses they can be carried forward. Remember this limited to AGI. example if your AGI is $2000 you cannot take the full $3000. You can take the $2000 and carry the $1000 forward.

2. Corporation on the other hand they don't have the $3,000 deduction. They can only deduct capital losses against capital income. IF NO capital income you cannot deduct the loss. Unused Net Capital Losses convert to Short term capital losses and can be carried back 3 yrs and forward 5 yrs.

[kky617]

@ Eliabraham

Thank you :)! Now I understand 🙂

[kky617]

@ Eliabraham

Thank you :)! Now I understand 🙂

[Author]

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