Title 26, Internal Revenue CodeRelease 119-73

§65 Ordinary Loss Defined

Title 26 › Subtitle Subtitle A— Income Taxes › Chapter 1— NORMAL TAXES AND SURTAXES › Subchapter B— Computation of Taxable Income › Part I— DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE INCOME, ETC. › § 65

Last updated Apr 6, 2026|Official source

Summary

An ordinary loss is a loss from selling or exchanging property that is not a capital asset. When another tax rule says a loss should be treated as ordinary, it is handled as if it came from selling non-capital-asset property. This matters because ordinary losses generally offset regular income without the limits that apply to capital losses.

Full Legal Text

Title 26, §65

Internal Revenue Code, Source: USLM XML via OLRC

For purposes of this subtitle, the term “ordinary loss” includes any loss from the sale or exchange of property which is not a capital asset. Any loss from the sale or exchange of property which is treated or considered, under other provisions of this subtitle, as “ordinary loss” shall be treated as loss from the sale or exchange of property which is not a capital asset.

Reference

Citations & Metadata

Citation

26 U.S.C. § 65

Title 26, Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73