2022 Standard Federal Tax Reporter (CCH) Committee Reports on P.L. 98-369 (Deficit Reduction Act of 1984), Congress (United States)

Summary

• Committee Report: Standard Federal Tax Reporter (2022), Committee Reports on P.L. 98-369 (Deficit Reduction Act of 1984)

  .033 Present Law. -Capital losses of individuals are deductible in full against capital gains. In addition, unused capital losses may be carried forward to future years indefinitely. A limited amount of capital losses may also be deducted against ordinary income. The present $3,000 limitation was adopted by the Tax Reform Act of 1976, which increased the limitation, from $1,000 under prior law, to $2,000 in 1977 and $3,000 in 1978 and subsequent years. For losses from years after 1969, only 50 percent of net long-term capital losses in excess of net short-term capital gains may be deducted from ordinary income. Thus, $6,000 of net long-term capital losses is required to offset $3,000 of ordinary income.

  In addition, in the interests of tax simplification, it is now appropriate to repeal the special rules applicable to unused capital losses incurred before 1970, since ...