CCH Learning Center

Description:
Individuals engage in a variety of economic activities: starting a business, investing, purchasing property, or initiating loans. People strive to earn income and generate financial gains. But some of these activities may instead result in losses. Individuals may suffer business losses, investment losses, or casualty losses. Property is damaged or stolen.

Although economic losses are never desirable, they generate tax losses that can be used to offset other taxable income and to reduce overall tax liabilities. However, there may be limits on the available loss deduction.

This course will look at the sources and proper treatment of tax losses as they affect individuals. The course will not focus on corporations, although many loss deductions may be common to both individuals and corporate entities.

Topics covered in this course include tax losses, limitations on deducting business losses, and forgiveness of debt.

Upon completion of this course, you will be able to:

• Identify sources of tax losses and determine the deductible loss;
• Calculate and claim net operating losses (NOLs) and other loss carryovers;
• Recognize limits on deducting business and investment losses; and
• Determine when to recognize cancellation of indebtedness income.