Capital Gains and Losses, Allocable and Apportionable Income, and General Electric Co. V. Iowa

Abstract

In this report, the authors review the interaction of the federal rules, with which most states conform, that limit the corporate capital loss deduction to capital gains for the tax year or to years to which the loss may be carried back or forward, with the constitutional and statutory rules for allocation and apportionment of income - rules that have no direct counterpart at the federal level. They focus on the recent case of General Electric Co. v. Iowa.