Petition to push for the adoption of Bill S. 978

To:  US Senate Committee On Finance

This is a petition to push for the adoption of Bill S.978: A bill to amend the Internal Revenue Code of 1986 to increase the limitation on capital losses applicable to individuals. http://www.govtrack.us/congress/bill.xpd?bill=s111-978

HATCH INTRODUCES BILL TO ALLOW HIGHER DEDUCTIONS FOR LOSSES ON INVESTMENTS

Washington – U.S. Sen. Orrin Hatch (R-Utah), along with U.S. Senator Blanche Lincoln (D-Ark.), yesterday introduced a bill that would increase significantly the amount of capital losses that an individual taxpayer can deduct in a year.

The Capital Loss Deduction Limitation bill would raise the annual amount of capital losses a taxpayer can deduct to $10,000, from the current $3,000, and then index it for future inflation.

On assets, investors receive ordinary income, such as dividends and interest, and capital gains, which occur when an individual sells his or her investment (stocks, bonds for example) for more than what was paid for it. A capital loss results when an individual sells his or her investment for less than what was paid for it. Capital losses can be offset against capital gains without limit. However, the current tax law limits the amount of capital loss that can be deducted against ordinary income to the amount of $3,000 per year. Unused capital losses can be carried over to future years indefinitely, where they can be used against future capital gains or again used to offset up to $3,000 in ordinary income.

“This is a question of fairness,” said Hatch. “Allowing individual investors to deduct only $3,000 per year when their total losses may come to many times that much is simply not fair. The tax code taxes gains without limit, so it should not place such a restrictive limitation on losses.”

Hatch noted that the $3,000 limitation has been in the tax law since 1978. "Had this limitation been indexed for inflation back in 1978, the $3,000 limit would instead now be about $9,700."

Many Americans experienced losses with their investments over the past couple of years, which has highlighted the fact that the current deduction limit is low and has not changed for 30 years.

"I have spoken with many Utahns who are very upset about the low capital loss deduction limit," continued Hatch. "One constituent with $60,000 in losses told me that unless he lived to age 90, he would not be able to claim his losses. This is not right and it is time we did something about it."

Sincerely,

The Undersigned

The Petition to push for the adoption of Bill S. 978 Petition to US Senate Committee On Finance was created by and written by Tung-Huy La (tunghuyla@hotmail.com).  This petition is hosted here at www.PetitionOnline.com as a public service. There is no endorsement of this petition, express or implied, by Artifice, Inc. or our sponsors. For technical support please use our simple Petition Help form.