§1212 — Capital loss carrybacks and carryovers
37 cases·8 followed·2 distinguished·27 cited—22% support
Statute Text — 26 U.S.C. §1212
If a corporation has a net capital loss for any taxable year (hereinafter in this paragraph referred to as the “loss year”), the amount thereof shall be—
a capital loss carryback to each of the 3 taxable years preceding the loss year, but only to the extent—
such loss is not attributable to a foreign expropriation capital loss, and
the carryback of such loss does not increase or produce a net operating loss (as defined in section 172(c)) for the taxable year to which it is being carried back;
except as provided in subparagraph (C), a capital loss carryover to each of the 5 taxable years succeeding the loss year; and
a capital loss carryover to each of the 10 taxable years succeeding the loss year, but only to the extent such loss is attributable to a foreign expropriation loss,
and shall be treated as a short-term capital loss in each such taxable year. The entire amount of the net capital loss for any taxable year shall be carried to the earliest of the taxable years to which such loss may be carried, and the portion of such loss which shall be carried to each of the other taxable years to which such loss may be carried shall be the excess, if any, of such loss over the total of the capital gain net income for each of the prior taxable years to which such loss may be carried. For purposes of the preceding sentence, the capital gain net income for any such prior taxable year shall be computed without regard to the net capital loss for the loss year or for any taxable year thereafter. In the case of any net capital loss which cannot be carried back in full to a preceding taxable year by reason of clause (ii) of subparagraph (A), the capital gain net income for such prior taxable year shall in no case be treated as greater than the amount of such loss which can be carried back to such preceding taxable year upon the application of such clause (ii).
For purposes of this subsection, the term “foreign expropriation capital loss” means, for any taxable year, the sum of the losses taken into account in computing the net capital loss for such year which are—
losses sustained directly by reason of the expropriation, intervention, seizure, or similar taking of property by the government of any foreign country, any political subdivision thereof, or any agency or instrumentality of the foregoing, or
losses (treated under section 165(g)(1) as losses from the sale or exchange of capital assets) from securities which become worthless by reason of the expropriation, intervention, seizure, or similar taking of property by the government of any foreign country, any political subdivision thereof, or any agency or instrumentality of the foregoing.
For purposes of paragraph (1), the portion of any net capital loss for any taxable year attributable to a foreign expropriation capital loss is the amount of the foreign expropriation capital loss for such year (but not in excess of the net capital loss for such year).
For purposes of paragraph (1), if a portion of a net capital loss for any taxable year is attributable to a foreign expropriation capital loss, such portion shall be considered to be a separate net capital loss for such year to be applied after the other portion of such net capital loss.
If a regulated investment company has a net capital loss for any taxable year—
paragraph (1) shall not apply to such loss,
the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss arising on the first day of the next taxable year, and
the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss arising on the first day of the next taxable year.
If a net capital loss to which paragraph (1) applies is carried over to a taxable year of a regulated investment company—
Clauses (ii) and (iii) of subparagraph (A) shall be applied without regard to any amount treated as a short-term capital loss under paragraph (1).
Paragraph (1) shall be applied by substituting “net capital loss for the loss year or any taxable year thereafter (other than a net capital loss to which paragraph (3)(A) applies)” for “net capital loss for the loss year or any taxable year thereafter”.
A net capital loss of a corporation shall not be carried back under paragraph (1)(A) to a taxable year—
for which it is a regulated investment company (as defined in section 851), or
for which it is a real estate investment trust (as defined in section 856).
If a taxpayer other than a corporation has a net capital loss for any taxable year—
the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year, and
the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss in the succeeding taxable year.
For purposes of determining the excess referred to in subparagraph (A) or (B) of paragraph (1), there shall be treated as a short-term capital gain in the taxable year an amount equal to the lesser of—
the amount allowed for the taxable year under paragraph (1) or (2) of section 1211(b), or
the adjusted taxable income for such taxable year.
For purposes of subparagraph (A), the term “adjusted taxable income” means taxable income increased by the sum of—
the amount allowed for the taxable year under paragraph (1) or (2) of section 1211(b), and
the deduction allowed for such year under section 151 or any deduction in lieu thereof.
For purposes of the preceding sentence, any excess of the deductions allowed for the taxable year over the gross income for such year shall be taken into account as negative taxable income.
If a taxpayer (other than a corporation) has a net section 1256 contracts loss for the taxable year and elects to have this subsection apply to such taxable year, the amount of such net section 1256 contracts loss—
shall be a carryback to each of the 3 taxable years preceding the loss year, and
to the extent that, after the application of paragraphs (2) and (3), such loss is allowed as a carryback to any such preceding taxable year—
40 percent of the amount so allowed shall be treated as a short-term capital loss from section 1256 contracts, and
60 percent of the amount so allowed shall be treated as a long-term capital loss from section 1256 contracts.
The entire amount of the net section 1256 contracts loss for any taxable year shall be carried to the earliest of the taxable years to which such loss may be carried back under paragraph (1). The portion of such loss which shall be carried to each of the 2 other taxable years to which such loss may be carried back shall be the excess (if any) of such loss over the portion of such loss which, after the application of paragraph (3), was allowed as a carryback for any prior taxable year.
An amount shall be allowed as a carryback under paragraph (1) to any prior taxable year only to the extent—
such amount does not exceed the net section 1256 contract gain for such year, and
the allowance of such carryback does not increase or produce a net operating loss (as defined in section 172(c)) for such year.
For purposes of paragraph (1), the term “net section 1256 contracts loss” means the lesser of—
the net capital loss for the taxable year determined by taking into account only gains and losses from section 1256 contracts, or
the sum of the amounts which, but for paragraph (6)(A), would be treated as capital losses in the succeeding taxable year under subparagraphs (A) and (B) of subsection (b)(1).
For purposes of paragraph (1)—
The term “net section 1256 contract gain” means the lesser of—
the capital gain net income for the taxable year determined by taking into account only gains and losses from section 1256 contracts, or
the capital gain net income for the taxable year.
The net section 1256 contract gain for any taxable year before the loss year shall be computed without regard to the net section 1256 contracts loss for the loss year or for any taxable year thereafter.
For purposes of applying subsection (b)(1), if any portion of the net section 1256 contracts loss for any taxable year is allowed as a carryback under paragraph (1) to any preceding taxable year—
40 percent of the amount allowed as a carryback shall be treated as a short-term capital gain for the loss year, and
60 percent of the amount allowed as a carryback shall be treated as a long-term capital gain for the loss year.
Any amount carried forward as a short-term or long-term capital loss to any taxable year under subsection (b)(1) (after the application of subparagraph (A)) shall, to the extent attributable to losses from section 1256 contracts, be treated as loss from section 1256 contracts for such taxable year.
For purposes of this subsection—
The term “section 1256 contract” means any section 1256 contract (as defined in section 1256(b)) to which section 1256 applies.
This subsection shall not apply to any estate or trust.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.1212-1 Capital loss carryovers and carrybacks
- Treas. Reg. §Treas. Reg. §1.1212-1(a) For purposes of computing a short-term capital loss carryover to the succeeding taxable year, an amount equal to the additional allowance for the taxable year (determined as provided in section 1211(b) and § 1.
- Treas. Reg. §Treas. Reg. §1.1212-1(b) For purposes of computing a long-term capital loss carryover to the succeeding taxable year, an amount equal to the sum of the additional allowance for the taxable year (determined as provided in section 1211(b) and § 1.
- Treas. Reg. §Treas. Reg. §1.1212-1(c) Husband and wife.
- Treas. Reg. §Treas. Reg. §1.1212-1(d) A net capital loss of a corporation for a year for which it is not an electing small business corporation under subchapter S shall not be carried back under section 1212(a)(1)(A) and subdivision (i)(a) of this subparagraph to a taxable year for which such corporation is an electing small business corporation.
- Treas. Reg. §Treas. Reg. §1.1212-1(e) A net capital loss of a corporation shall not be carried back under section 1212(a)(1)(A) and subdivision (i)(a) of this subparagraph to a taxable year for which the corporation was a foreign personal holding company, a regulated investment company, or a real estate investment trust, or for which an election made by the corporation under section 1247 is applicable.
- Treas. Reg. §Treas. Reg. §1.1212-1(f) A taxable year to which a net capital loss of a corporation cannot, by reason of (d) or (e) of this subdivision, be carried back under section 1212(a) (1)(A) and subdivision (i)(a) of this subparagraph shall nevertheless be treated as 1 of the 3 taxable years preceding the loss year for purposes of section 1212(a)(1)(A) and such subdivision (i)(a); but any capital gain net income (net capital gain for taxable years beginning before January 1, 1977) for such taxable year to which such net capital
- Treas. Reg. §Treas. Reg. §1.1212-1(g) A regulated investment company (as defined in section 851) sustaining a net capital loss shall carry over that loss to each of the 8 taxable years succeeding the loss year.
- Treas. Reg. §Treas. Reg. §1.1212-1(i) If a husband and wife making a joint return for any taxable year made separate returns for the preceding year, any capital loss carryovers of each spouse from such preceding taxable year may be carried forward to the taxable year in accordance with paragraph (a) or (b) of this section.
- Treas. Reg. §Treas. Reg. §1.1212-1(v) If separate returns are made both for the taxable year and the preceding taxable year, any capital loss carryover of each spouse may be carried forward by such spouse in accordance with paragraph (a) or (b) of this section.
37 Citing Cases
The language of section 1371(b) ("No carryforward, and no carryback") is broad, unlike that of other sections which specify certain types of carryforwards and carrybacks. See supra note 4. The legislative history of section 1371(b) supports a broad 4 See, e.g., sec. 170(d)(1) and (2) (charitable contributions); sec. 38(a) (business credit carryforwards and carrybacks); sec. 172 (net operating loss carryovers and carrybacks); sec. 904(c) (foreign tax credit); sec. 1212 (capital loss carrybacks an
The issues for decision are: (1) Whether petitioner is entitled to a SERVED JAN 2 7 2011 - 2 - capital loss carryover pursua t to section 1212 (b) ; i (2) whether !
Section 1212 provides for capital loss carrybacks and carryovers; those rules are in general more generous to corporations than to individuals. Respondent noted petitioners' eligibility for capital loss carryovers treatment; petitioners do not claim eligibility for carryback treatment. As a result of the foregoing, although .capital gains and losse
Section 1212 provides for capital loss carrybacks and carryovers; those rules are 1.n general more generous to corporations than to individuals. Respondent noted petitioners' eligibility for capital loss carryovers treatment; petitioners do not claim eligibility for carryback treatment. As a result of the foregoing, although capital gains and losse
Under section 1212 any net capital losses that are disallowed as a result of the limitation in section 1211 may be carried forward to the next taxable year. At trial, petitioners submitted a Form 1099-B which listed aggregate losses of $7,547.55 from futures contracts. Petitioners reported a Schedule D capital loss of $7,543 on their revised 1995 Form 10
- 15 - Under section 1212 any net capital losses that are disallowed as a result of the limitation in section 1211 may be carried forward to the next taxable year.
- 4 - [*4] granted both motions. Thus, the only tax liability currentlybefore us is Amnesty National's corporate income tax liability for 2014. On January 17, 2018, respondent sent petitioner a letter informally request- ing that it produce documents to substantiate its claimed deductions and inviting Ms. Esposito to a conference on Feb
1212, 100 Stat. at 2536, as applicable here, was thereafter amended by Congress in the Technical and Miscellaneous Revenue Act of 1988, Pub. L. No. 100-647, sec. 1012(e)(1), (2)(A), and (5), 102 Stat. at 3499-3500, and in the Omnibus Budget Reconciliation Act of 1989, Pub. L. No. 101-239, sec. 7811(i)(8)(D), and (10), 103 Stat. at 2411. Those
em results in what may be perceived as an inequitable result, Congress can act to remedy any inequity, as evidenced by the net operating loss carryback and carryoverrules found in sec. 172 and the capital loss carryback and carryover rules found in sec. 1212. - 20 - embodiment ofa systenh ofannual accounting, it is beyond dispute that section 1.152- 2(a)(1), Income Tax Regs., is reasonable and "based on a permissible construction of the statute." Chevron, 467 U.S. at 843. And while "'neither ant
em results in what may be perceived as an inequitable result, Congress can act to remedy any inequity, as evidenced by the net operating loss carryback and carryover rules found in sec. 172 and the capital loss carryback and carryover rules found in sec. 1212. We today decide another citizenship test case consistently. Stem v. Commissioner, T.C. Memo. 2012-204. Petitioners apparently concede that, in determining whether the children were qualifying children and, thus, dependents under sec. 152(a
Under section 1398(g), the estate succeeds to certain of the debtor’s income tax attributes, including the debtor’s NOL carryovers (under section 172) and capital loss carryovers (under section 1212) from tax periods prior to the commencement of the bankruptcy.
Under section 1398(g), the estate succeeds to certain of the debtor’s income tax attributes, including the debtor’s NOL carryovers (under section 172) and capital loss carryovers (under section 1212) from tax periods prior to the commencement of the bankruptcy.
Finally, section 535(b)(7) makes inapplicable the ordering rules for capital losses under section 1212 and provides for the carryover of the prior year’s net capital loss.
Finally, section 535(b)(7) makes inapplicable the ordering rules for capital losses under section 1212 and provides for the carryover of the prior year’s net capital loss.
carryovers of any credit, and all other items which, but for the commencement of the case, would be required to be taken into account by the debtor with respect to any credit. (5) Capital loss carryovers.--The capital loss carryover determined under section 1212. (6) Basis, holding period, and character of assets.--In the case of any assets acquired (other than by sale or exchange) by the estate from the debtor, the basis, holding period, and character it had in the hands of the debtor. (7) Meth
of other provisions of sec. 1371(b). See, e.g., sec. 170(d)(1) and (2) (charitable contributions); sec. 38(a) (business credit carryforwards and carrybacks); sec. 172 (net operating loss carryovers and carrybacks); sec. 904(c) (foreign tax credit); sec. 1212 (capital loss carrybacks and carryovers); sec. 1374(b)(2) and (3) (net operating loss carryforward, capital loss carryforward, and business credit carryforwards). Sec. 1374(b) provides limited exceptions for the purpose of calculating the t