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Capital losses offset capital gains, dollar for dollar, and $3,000 of net capital losses can be used against ordinary income each year.
It excludes net capital investment.
In its filings, MF Global said it had "increased its net capital".
Fiscal versus net capital flow concerns", by Joshua Aizenman and Gurnain Kaur Pasricha.
Interest and dividends made up 16 percent and net capital gains accounted for nearly 57 percent.
MF Global had separate trading operations around the world, each with its own net capital requirements.
Up to $3,000 of net capital losses can be deducted from ordinary income.
In recent years it has become the world's largest net capital exporter.
As a group, they had net capital losses of $600 million.
"A net capital violation is a major, major, major red flag," he said.
Qualified dividends are ordinary dividends that meet the requirements to be taxed as net capital gains.
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