What is the maximum net capital loss a taxpayer can deduct in one year?

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The maximum net capital loss a taxpayer can deduct in one year is $3,000 for individuals. This deduction applies to net capital losses, which occur when a taxpayer's capital losses exceed their capital gains for the year.

If a taxpayer has a net capital loss, they can apply it against other income, such as wages, to reduce their taxable income. The IRS allows taxpayers to deduct up to $3,000 ($1,500 if married filing separately) in net capital losses in a single tax year.

Any net capital loss beyond this limit can be carried forward to future tax years, allowing taxpayers to use the excess deductions in subsequent years, subject to the same deduction limitations. This provision ensures that taxpayers are not entirely disadvantaged by capital losses in a given year and can recoup some of their losses over time.

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