Internal Revenue Code:Sec. 1211. Limitation on capital losses

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Location in Internal Revenue Code

     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle A - Income Taxes
       CHAPTER 1 - NORMAL TAXES AND SURTAXES
        Subchapter P - Capital Gains and Losses
         PART II - TREATMENT OF CAPITAL LOSSES
       

Statute

    Sec. 1211. Limitation on capital losses
 
    (a) Corporations
      In the case of a corporation, losses from sales or exchanges of
    capital assets shall be allowed only to the extent of gains from
    such sales or exchanges.
    (b) Other taxpayers
      In the case of a taxpayer other than a corporation, losses from
    sales or exchanges of capital assets shall be allowed only to the
    extent of the gains from such sales or exchanges, plus (if such
    losses exceed such gains) the lower of -
        (1) $3,000 ($1,500 in the case of a married individual filing a
      separate return), or
        (2) the excess of such losses over such gains.
 

Sources

    (Aug. 16, 1954, ch. 736, 68A Stat. 321; Pub. L. 91-172, title V,
    Sec. 513(a), Dec. 30, 1969, 83 Stat. 642; Pub. L. 94-455, title V,
    Sec. 501(b)(6), title XIV, Sec. 1401(a), (b), Oct. 4, 1976, 90
    Stat. 1559, 1731; Pub. L. 95-30, title I, Sec. 102(b)(14), May 23,
    1977, 91 Stat. 138; Pub. L. 99-514, title III, Sec. 301(b)(10),
    Oct. 22, 1986, 100 Stat. 2217.)
 

Miscellaneous

                                 AMENDMENTS
      1986 - Subsec. (b). Pub. L. 99-514 amended subsec. (b) generally,
    substituting present provisions for provisions which had declared
    in: par. (1), general rule for limitation on capital losses for
    taxpayer other than corporation; in par. (2), meaning of term
    ''applicable amount''; and in par. (3), rule relating to
    computation of taxable income.
      1977 - Subsec. (b)(1)(A). Pub. L. 95-30 inserted ''reduced (but
    not below zero) by the zero bracket amount'' after ''taxable
    year''.
      1976 - Subsec. (b)(1)(B). Pub. L. 94-455, Sec. 1401(a),
    substituted ''the applicable amount'' for ''$1,000''.
      Subsec. (b)(2). Pub. L. 94-455, Sec. 1401(b), substituted
    provision relating to ''applicable amount'' for prior provision
    limiting amount of capital losses for married individuals and
    reading ''In the case of a husband or wife who files a separate
    return, the amount specified in paragraph (1)(B) shall be $500 in
    lieu of $1,000.''
      Subsec. (b)(3). Pub. L. 94-455, Sec. 501(b)(6), struck out last
    sentence ''If the taxpayer elects to pay the optional tax imposed
    by section 3, 'taxable income' as used in this subsection shall
    read as 'adjusted gross income'.''
      1969 - Subsec. (b). Pub. L. 91-172 provided for only 50 percent
    of an individual's long-term capital losses to be offset against
    his ordinary income up to the $1,000 limit although short-term
    capital losses continue to be fully deductible within the $1,000
    limit and the deduction of capital losses against ordinary income
    for married persons filing separate returns to be limited to $500
    for each spouse rather than the $1,000 formerly allowed.
                      EFFECTIVE DATE OF 1986 AMENDMENT
      Amendment by Pub. L. 99-514 applicable to taxable years beginning
    after Dec. 31, 1986, see section 301(c) of Pub. L. 99-514, set out
    as a note under section 62 of this title.
                      EFFECTIVE DATE OF 1977 AMENDMENT
      Amendment by Pub. L. 95-30 applicable to taxable years beginning
    after Dec. 31, 1976, see section 106(a) of Pub. L. 95-30, set out
    as a note under section 1 of this title.
                      EFFECTIVE DATE OF 1976 AMENDMENT
      Amendment by section 501(b)(6) of Pub. L. 94-455 applicable to
    taxable years beginning after Dec. 31, 1975, see section 508 of
    Pub. L. 94-455, set out as a note under section 3 of this title.
      Section 1401(c) of Pub. L. 94-455 provided that: ''The amendments
    made by this section (amending this section) shall apply to taxable
    years beginning after December 31, 1976.''
                      EFFECTIVE DATE OF 1969 AMENDMENT
      Section 513(d) of Pub. L. 91-172 provided that: ''The amendments
    made by this section (amending this section and sections 1212 and
    1222 of this title) shall apply to taxable years beginning after
    December 31, 1969.''
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 32, 165, 221, 641, 691,
    1212, 1222, 1231 of this title.