What are the differences in the treatment of capital gains and capital losses of corporations and of individuals?
Capital gains and capital losses of corporations and individuals are treated differently. Corporations are not allowed to take deductions for net capital losses in the year in which they occur and they are never allowed to use capital losses to reduce ordinary income. Corporate taxpayers may use capital losses against capital gains; however, losses can be carried back. Individuals can use net capital losses to reduce ordinary income and can use losses against capital gains.