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From: dgh@sun.uucp (David Hough)
Newsgroups: net.taxes
Subject: Re: Tax Reform efforts
Message-ID: <2247@sun.uucp>
Date: Thu, 30-May-85 21:42:34 EDT
Article-I.D.: sun.2247
Posted: Thu May 30 21:42:34 1985
Date-Received: Sat, 1-Jun-85 14:43:58 EDT
References: <11085@brl-tgr.ARPA>
Reply-To: dgh@sun.UUCP (David Hough)
Distribution: net
Organization: Sun Microsystems, Inc.
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In article <11085@brl-tgr.ARPA> wmartin@brl-tgr.ARPA (Will Martin ) writes:
>A query about the seemingly innumerable tax reform packages and proposals
>that get uniformly uninfomative news coverage these days:

General circulation newspapers skip over most of the bad news in
tax reform proposals since they do not directly affect most taxpayers,
and the reporters don't understand the issues.

>
>My current tax situation has, for the past 4 or so years, included
>a $3000 loss each year from a large loss we incurred when my wife tried
>to open and run a retail business. The tax laws have allowed us to write off 
>this loss, but we are limited to writing off only $3000 per year from the
>total, and carrying forward the remainder to next year's return.
>

Sounds like a capital loss carryover rather than an operating loss carryover which
might be fully deductible immediately.  I would guess that as long as capital 
gains are treated
differently from ordinary income, capital losses will be carried forward.   One
possibility is that capital losses will not be allowed as deductions against
income other than capital gains, which would mean that you would not be able
to recover your losses by reducing ordinary income.  You would have to find
some capital gains.
 
>Now, I expect that, no matter what tax reform package ever gets adopted,
>it will not take effect for some time, so maybe this will all be
>written off under the current law by the time any such new system is
>adopted, so maybe this issue is really moot, as far as I am concerned.

Don't count on it.  The Treasury proposal had some provisions which were
to be effective as of the date the legislation was introduced, rather than
enacted.  That had such a bad effect on the real estate industry that
Congressional leaders had to hold a news conference to say that they wouldn't
enact any such retroactive legislation.  But you know the value of a 
politician's promise.

The worst thing is that "our" elected representatives are perfectly willing
to vote on such complex legislation without reading it, much less
understanding it.  So it is not surprising to read that an anti-loophole
passed as part of ERTA due to a typographical error has never been repealed.
The 1984 tax legislation was about 1000 pages of fine print.
If something specific is important to you, you might write a letter to your
congressman about a week after you send a large check to his re-election
committee.  This is now known as "obtaining access" rather than "bribery".

David Hough