What is the maximum amount of net capital losses that can be deducted in a given tax year?

The maximum amount of net capital losses that can be deducted in a given tax year is $3,000 for individuals. This limit applies to the amount that can offset ordinary income. If a taxpayer has a net capital loss that exceeds this amount, the excess can be carried forward to subsequent years to offset future capital gains or up to $3,000 of ordinary income in those future years.

This deduction limit is established under the Internal Revenue Code and is particularly relevant for individuals who may be facing capital losses from their investments. It provides a tax relief mechanism for taxpayers, allowing them to mitigate the tax impact of their investment losses within the framework set by the IRS.