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Capital Gains and Losses for Corporations

Capital gains will represent a C corporation’s sold appreciated assets that are not used in its ordinary course of business operations. Sales of capital assets that result in a loss will have specific deduction rules and limitations that apply to its C Corp status. Unlike individuals, corporations may only offset capital losses to the extent of their capital gains. Excess capital losses over capital gains will not be able to be carried back, however, they can be carried forward for an indefinite amount of time. **Please note, individual taxpayers can offset income outside of capital gains to the extent of $3,000 in ordinary income. Corporations will have no such privilege.

Capital Loss Carryover –Capital losses will be carried over as a short-term capital loss and become applied against capital gains. Corporations can carry forward losses 5 years and carry back losses 3 years. Additionally, capital losses cannot be used to offset ordinary income.

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