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Capital losses
Losses from the sale or exchange of a capital asset. The excess of capital losses over capital gains is called a net capital loss. A corporation may deduct a capital loss of any taxable year in the year only to the extent of capital gain. The excess of losses may be carried back three years and carried forward five years, but only as an offset against capital gains of such later years. If there are no such capital gains, the deduction is lost. In the case of an individual, short-term and long-term capital losses are combined for purposes of offsetting up to $3,000 of ordinary income annually. Excess losses may be carried forward indefinitely.