Deductions for Specified Losses

Deductions for Specified Losses

Learn about deductions for business, investment, casualty, and theft, as well as net operating losses.


In this lesson, we'll start by surveying the deductibility of specified losses for individual taxpayers under the Internal Revenue Code, or IRC. Then, we'll familiarize ourselves with net operating losses, or NOLs.

Losses Generally

A loss is usually a sale or other disposition of property in which the taxpayer's amount realized exceeds the adjusted basis. See 26 U.S.C. §§ 165(b), 1001(a). Suppose a taxpayer owns equipment with an adjusted basis of $100,000. The taxpayer sells the equipment for...