What does ordinary loss mean on the CPA exam?
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Ordinary loss. A loss deductible against ordinary income without the capital loss limits. Which losses qualify is the point of several Code sections.
Defined against Sec. 165.
Which CPA exam sections use ordinary loss?
Ordinary loss appears in the REG section of the CPA exam.
Related terms
- capital loss: Loss on the sale of a capital asset.
- ordinary income: Income taxed at the regular graduated rates rather than at preferential capital gain rates.
- disallowed loss: A loss the Code refuses to let you deduct, typically on a sale to a related person or a wash sale.
- net operating loss: A year in which allowable deductions exceed gross income.
- excess business loss: The amount by which a noncorporate taxpayer's aggregate business deductions exceed business income plus a threshold.
- built-in loss: Loss that already existed in property before it changed hands, measured at the transfer date.