26 U.S.C. § 1211

Limitation on capital losses

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

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, § 1401(a), substituted “the applicable amount” for “$1,000”.

Subsec. (b)(2). Pub. L. 94–455, § 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, § 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.

Statutory Notes and Related SubsidiariesEffective 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.

Pub. L. 94–455, title XIV, § 1401(c), Oct. 4, 1976, 90 Stat. 1731, 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

Pub. L. 91–172, title V, § 513(d), Dec. 30, 1969, 83 Stat. 643, 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.”

Notes of Decisions

Cited in 49 cases (1 in the last 5 years), 1928–2023 · leading case: Comm'r v. Fink, 483 U.S. 89 (1987).

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Comm'r v. Fink, 483 U.S. 89 (1987). · cites it 4× “26 U. S. C. § 1211 . In contrast, ordinary losses generally are deductible from ordinary income without limitation.”

Comm'r v. Clark, 489 U.S. 726 (1989). · cites it 2× “For example, 26 U. S. C. § 1211 (b) (1982 ed., Supp. IV) allows individual taxpayers to deduct capital losses to the full extent of their capital gains, but only allows them to offset up to $3,000 of ordinary income insofar as their capital losses exceed their capital gains.”

Schroerlucke v. United States, 100 Fed. Cl. 584 (Fed. Cl. 2011). · cites it 7× “00, pursuant to 26 U.S.C. § 1211 (b) (2006) on their 2002 return.”

Duquesne Light Holdings Inc v. Comm'r of Internal Reven, 861 F.3d 396 (3rd Cir. 2017). · cites it 2× “26 U.S.C. § 1211 (a) provides that corporations may deduct capital losses only to offset capital gains from the sale of different assets, and section 1212(a)(1)(A) allows corporations to carry back capital losses up to three years.”

Compaq Comput. Corp. & Subsidiaries v. Comm'r, 277 F.3d 778 (5th Cir. 2001). “26 U.S.C. § 1211 (a) (corporation’s "losses from sales or exchanges of capital assets shall be allowed only to the extent of gains from such sales or exchanges”); Circle K Corp.”

Arkansas Best Corp. v. Comm'r, 485 U.S. 212 (1988). “1 Title 26 U. S. C. § 1211 (a) states that “[i]n 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.”

Comm'r of Internal Revenue v. Liberty Bank & Trust Co., 59 F.2d 320 (6th Cir. 1932). · cites it 2× “There can be no question that the Board of Tax Appeals is an executive or administrative tribunal of the government.”

In Re Manfred, 153 B.R. 430 (Bankr. D.N.J. 1993). · cites it 2× “Title 26 U.S.C. § 1211 (b). Then the remaining capital loss is deductible only to the extent of $3,000.”

W. W. Windle Co. v. Comm'r of Internal Revenue, 550 F.2d 43 (1st Cir. 1977). “On audit, the Commissioner determined that the loans made to Nor-West, as well as the accounts receivable owed by Nor-West, were an equity investment by Windle and subject to the capital loss limitations of 26 U.S.C. § 1211 . The Commissioner also determined that the loss on the…”

In Re Club Assocs., 107 B.R. 385 (Bankr. N.D. Ga. 1989). “26 U.S.C. §§ 1211 , 1212. 38 . As of the date of entry of this order, as a result of three applications by Club’s attorneys for interim compensation, a total of $421,791.”

Stephen Marrin & Jane Marrin v. Comm'r of Internal Revenue, 147 F.3d 147 (2d Cir. 1998). “However, losses from the sale or exchange of capital assets are only deductible to the extent allowed under 26 U.S.C. §§ 1211 and 1212. Under § 1211(b), an individual taxpayer may deduct a capital loss up to the amount of the taxpayer’s capital gains plus, if losses exceed…”

Brooks v. Mandel-Witte Co., 54 F.2d 992 (2d Cir. 1932). · cites it 2× “The Board of Tax Appeals, by the act creating it, is declared to be a board and independent agency in the executive branch of the government.”

Show all 49 citing cases →

— 26 U.S.C. § 1211(b) — 1 case

Henry J. Moravec & Vlasta Moravec v. Comm'r of Internal Revenue, Henry J. Moravec & Marlene Moravec v. Comm'r of Internal Revenue, 500 F.2d 1298 (7th Cir. 1974).

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