Question

I:5-26 How might the current treatment of capital losses discourage an individual investor from purchasing stock of a high-risk, start-up company?

Answer 1

the current treatment of capital losses have an impact on the taxpayer.if the individual taxpayer does not have capital gains,only $3000 of capital gains we'll be deducted each year.so if huge loss is injured by the individual ,it may take many years to wipe off that capital losses .

the present treatment of capital losses may depress individual investors from purchasing stock of a high-trisk ,start up company.this have an huge impact on the investor decision.