Capital loss

Capital loss is the difference between a lower selling price and a higher purchase price, resulting in a financial loss for the seller.[1][2] The IRS states that "If your capital losses exceed your capital gains, the excess can be deducted on your tax return".[3] Limits on such deductions apply.

Special wash sale rules apply if the same or substantially similar security is bought, acquired, or optioned within 30 days before or after the sale.

United States

Real estate loss

According to 26 U.S.C. §121, a capital loss on the sale of a primary residence is generally tax-exempt.

References

  1. ↑ Sullivan, Arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. p. 283. ISBN 0-13-063085-3.
  2. ↑ "Capital Loss Definition". Investopedia.
  3. ↑ IRS TAX TIP 2009-35 IRS TAX TIP 2009-35