As with any capital loss, it is first deducted from capital gains then up to $3,000 can be an ordinary deduction, with the rest carried forward.
With the stockmarket so depressed, the banks now face larger deductions from their capital bases.The reformers, on the other hand, have been pushing a tough new plan fronted by Hakuo Yanagisawa, Mr Mori's minister in charge of the bank clean-up.
There are a wide range of corporate deductions, involving special depreciation allowances and upfront deductions for capital expenditures, which are also ripe for cutting back.
The law forbids deductions for capital losses in a wash sale.
Mortgage-interest deductions and exemptions from capital gains for residential property both favour excessive saving in property.
But paying "next to nothing," resulting from capital losses and various legal deductions, normal and creative, is distinctly possible.
Exceptions to a tax code such as deductions, the indexation of exemptions, and the measurement of income from capital for inflation reduce the potential for stabilization.
The remainder would come from the other four tax changes for Americans with the highest income, two raising taxes on investment income from capital gains and dividends and two restoring restrictions on the itemized deductions and exemptions claimed by high earners.
Seldom mentioned is that Mr. Obama's revenue total also reflects four other changes from Bush-era tax cuts: higher tax rates on investment income from capital gains and dividends, and the restoration of two other Clinton-era provisions limiting deductions and tax exemptions for affluent individuals.
That effective tax rate was far below the 35 percent top rate on the highest incomes because much of his income is from capital gains and dividends, which are taxed at 15 percent, and because he claimed an assortment of tax deductions.
"Each wrapper represented a supposed deduction from my smuggling fee.
