
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC1211]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
                 Subchapter P--Capital Gains and Losses
 
                  PART II--TREATMENT OF CAPITAL LOSSES
 
Sec. 1211. Limitation on capital losses


(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 taxpayers

    In 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, 
Sec. 513(a), Dec. 30, 1969, 83 Stat. 642; Pub. L. 94-455, title V, 
Sec. 501(b)(6), title XIV, Sec. 1401(a), (b), Oct. 4, 1976, 90 Stat. 
1559, 1731; Pub. L. 95-30, title I, Sec. 102(b)(14), May 23, 1977, 91 
Stat. 138; Pub. L. 99-514, title III, Sec. 301(b)(10), Oct. 22, 1986, 
100 Stat. 2217.)


                               Amendments

    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, Sec. 1401(a), substituted 
``the applicable amount'' for ``$1,000''.
    Subsec. (b)(2). Pub. L. 94-455, Sec. 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, Sec. 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.


                    Effective 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.
    Section 1401(c) of Pub. L. 94-455 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

    Section 513(d) of Pub. L. 91-172 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.''

                  Section Referred to in Other Sections

    This section is referred to in sections 32, 165, 221, 641, 691, 
1212, 1222, 1231 of this title.
