Section 3: 5–15%R10
Capital Gains and Losses
Exam insight
The netting process and the $3,000 individual loss limit show up on nearly every REG form. Mixing up the individual rules with the corporate rules is the single most common capital-gains mistake.
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What AICPA wants you to know
- 1Identify capital assets by exclusion
- 2Apply the holding-period rule to classify gains as short- or long-term
- 3Perform the short-term/long-term netting process
- 4Apply the $3,000 individual capital loss limitation and indefinite carryforward
- 5Contrast the individual and corporate capital loss rules
- 6Apply the wash-sale and related-party loss disallowance rules