Federal Taxation of Individuals: Losses and Limitations Flashcards
Can Individuals claim casualty losses for personal property without a federally declared disaster?
No. Individuals can only take personal casualty loss deductions for federally declared disasters. However, I think they can always deduct theft losses.
What is the amount of loss that can be taken casualty/theft for personal property vs business/investment property?
Personal/Partially lost or stolen: Lesser of decline in FMV or basis less reimbursement
Business/Investment property completely lost or stolen: Amount of adjusted basis
What is the special timing rule for casualty losses relating to disaster areas?
The loss can be deducted on the year the disaster occurred or the prior year.
Can a corporation use net capital losses to offset other income?
No. Capital losses can only offset capital gains. Excesses must be carried forward/back.
What is the carry forward/back period for capital losses for corporations?
Carried back three years and carried forward five years.
What is the character of capital losses carried back or forward for corporations?
All capital loss carryovers for corporations are treated as STCL regardless of what their original character was.
Can an individual use net capital losses to offset other income?
Yes, up to $3,000.
What is the carry forward/back period for capital losses for individuals.
Carried forward indefinitely.
What is the carry forward/back period for NOLs incurred in 2021?
Carried forward indefinitely
How to qualify as real estate rental professional?
(1) More than 50% of individual’s personal services during the year are for real estate trades or businesses.
(2) More than 750 hours of personal services are for real estate trades or businesses that individual materially participates in.
