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TITLE 26-INTERNAL REVENUE CODE ital gain" for "In the case of a taxpayer other than a corporation, if for any taxable year the net long-term capital gain exceeds the net short-term capital loss, 50 percent of the amount of such excess" preceding "shall be a deduction from gross income". EnFcTivE DATE OF 1976 AmENDMENT Amendment by Pub. L. 94-455 applicable with re- spect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as an Ef- fective Date of 1976 Amendment note under section 2 of this title. CROSS REFEwmcES Adjusted gross income as gross income minus, among others, deduction for long-term capital gains, see sec- tion 62 of this title. Deductions from gross income for individuals gener- ally, see section 141 et seq. of this title. Estates and trusts allowed benefit of this section, see section 642 of this title. Gains derived from dealings in property as gross income, see section 61 of this title. Nonresident alien's gains not subject to this section, see section 871 of this title. Taxpayers other than corporations not allowed de- duction under this section for net operating loss de- duction, see section 172 of this title. SECTION REFERRED TO IN OTMM SECTIONS This section is referred to in sections 62, 163, 172, 642, 643, 871 of this title. PART II-TREATMENT OF CAPITAL LOSSES Sec. 1211. Limitation on capital losses. 1212. Capital loss carrybacks and carryovers. AMENDMENTS 1969-Pub. L. 91-172, title V, § 512(f)(2). Dec. 30, 1969, 83 Stat. 641, substituted "carrybacks and car- ryovers" for "carryover" in item 1212. § 1211. Limitation on capital losses (a) Corporations In the case of a corporation, losses from sales or exchanges of capital assets shall be allowed only to the extent of gains from such sales or exchanges, (b) Other taxpayers (1) In general In the case of a taxpayer other than a cor- poration, losses from sales or exchanges of capital assets shall be allowed only to the extent of the gains from such sales or ex- changes, plus (if such losses exceed such gains) whichever of the following is smallest: (A) the taxable income for the taxable year, (B) the applicable amount (C) the sum of- (I) the excess of the net short-term cap- ital loss over the net long-term capital gain, and (ii) one-half of the excess of the net long-term capital loss over the net short- term capital gain. Taxpayers other than corporation not deduc- tions under this section for net operating loss deduction, see section 172 of this title. (2) Applicable amount For purposes of paragraphs (1)(B), the term "applicable amount" means- (A) $2,000 in the case of any taxable year beginning in 1977; and (B) $3,000 in the case of any taxable year beginning after 1977. In the case of a separate return by a husband or wife, the applicable amount shall be one- half of the amount determined under the pre- ceding sentence. (3) Computation of taxable income For purposes of paragraph (1), taxable income shall be computed without regard to gains or losses from sales or exchanges of cap- ital assets and without regard to the deduc- tions provided in section 151 (relating to per- sonal exemptions) or any deduction in lieu thereof. (Aug. 16, 1954, ch. 736, 68A Stat. 321; Dec. 30, 1969, Pub. L. 91-172, title V, § 513(a), 83 Stat. 642; Oct. 4, 1976, Pub. L. 94-455, title V. §501(b)(6), title XIV, § 1401(a), (b), 90 Stat. 1559, 1731.) AMENDMENTS 1976-Subsec. (b)(1)(B). Pub. L. 94-455, § 1401(a), substituted "the applicable amount" for "$1,000". Subsec. (b)(2). Pub. L. 94-455, § 1401(b), substituted provision relating to "applicable amount" for prior provision limiting amount of capital losses for married individuals and reading "In the case of a husband or wife who files a seperate return, the amount specified in paragraph (1)(B) shall be $500 in lieu of $1,000." Subsec. (b)(3). Pub. L. 94-455, § 501(b)(6), struck out last sentence "If the taxpayer elects to pay the option- al tax imposed by section 3, 'taxable income' as used in this subsection shall read as 'adjusted gross income'." 1969-Subsec. (b). Pub. L. 91-172 provided for only 50 percent of an individual's long-term capital losses to be offset against his ordinary income up to the $1,000 limit although short-term capital losses continue to be fully deductible within the $1,000 limit and the deduc- tion of capital losses against ordinary income for mar- ried persons filing separate returns to be limited to $500 for each spouse rather than the $1,000 formerly allowed. EFFECTIv DATE OF 1976 AMENDMENT Amendment of subsec. (b)(3) by section 501(b)(6) of Pub, L. 94455 applicable to taxable years beginning after Dec. 31, 1975, see section 508 of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 3 of this title. Section 1401(c) of Pub. L. 94-455 provided that: "The amendments made by this section [to subsecs. (b)(1)(B), (2) of this section] shall apply to taxable years beginning after December 31, 1976." EFFEcTIvE DATE OF 1969 AMENDMENT Section 513(d) of Pub. L. 91-172 provided that: "The amendments made by this section [amending this sec- tion and sections 1212 and 1222 of this title] shall apply to taxable years beginning after December 31, 1969." CROSS REFERzNCES Capital losses- Allowed to certain insurance companies, see sec- tion 832 of this title. Deductible from gross income, see section 165 of this title. Corporations improperly accumulating income, cap- ital losses, see section 535 of this title. Gross investment income defined for mutual insur- ance companies, see section 822 of this title. Losses from compulsory or involuntary conversions, see section 1231 of this title. § 1211 Page 676