Section 3: 5–15%R10
Capital Gains and Losses
Exam Insight
The netting process and the $3,000 individual loss limit are tested on nearly every REG form. Confusing the individual rules with the corporate rules is the single most common capital-gains error.
CPA Exam Lab is an independent study resource and is not affiliated with, endorsed by, or sponsored by the AICPA® or NASBA. Practice questions are original content created for study purposes. “CPA” is a registered trademark of the AICPA.
What AICPA Wants You to Know
- 1Identify capital assets by exclusion
- 2Apply the holding-period rule to classify gains as short- or long-term
- 3Perform the short-term/long-term netting process
- 4Apply the $3,000 individual capital loss limitation and indefinite carryforward
- 5Contrast the individual and corporate capital loss rules
- 6Apply the wash-sale and related-party loss disallowance rules