loss. 1. An undesirable outcome of a risk; the disappearance or diminution of value, usu. in an unexpected or relatively unpredictable way. • When the loss is a decrease in value, the usual method of calculating the loss is to ascertain the amount by which a thing’s original cost exceeds its later selling price. 2.Tax. The excess of a property’s adjusted value over the amount realized from its sale or other disposition. IRC (26 USCA) § 1001. — Also termed realized loss. [Cases: Internal Revenue 3178.C.J.S. Internal Revenue § 110.] 3.Insurance. The amount of financial detriment caused by an insured person’s death or an insured property’s damage, for which the insurer becomes liable. 4. The failure to maintain possession of a thing.
actual loss.A loss resulting from the real and substantial destruction of insured property.
actual total loss. 1. See total loss. 2.Marine insurance. The total loss of a vessel covered by an insurance policy (1) by its real and substantive destruction, (2) by injuries that destroy its existence as a distinct individual of a particular class, (3) by its being reduced to a wreck irretrievably beyond repair, or (4) by its being placed beyond the insured’s control and beyond the insured’s power of recovery. [Cases: Insurance 2235. C.J.S. Insurance §§ 1195–1196, 1216–1217.] capital loss.The loss realized upon selling or exchanging a capital asset. Cf. CAPITAL GAIN.
casualty loss.For tax purposes, the total or partial destruction of an asset resulting from an unexpected or unusual event, such as an automobile accident or a tornado. [Cases: Internal Revenue 3416; Taxation 1039.]
consequential loss.A loss arising from the results of damage rather than from the damage itself. • A consequential loss is proximate when the natural and probable effect of the wrongful conduct, under the circumstances, is to set in operation the intervening cause from which the loss directly results. When the loss is not the natural and probable effect of the wrongful conduct, the loss is remote. — Also termed indirect loss; consequential injury. Cf. direct loss. [Cases: Damages 15–23. C.J.S. Damages §§ 21–37.]
constructive total loss. 1. Such serious damage to the insured property that the cost of repairs
would exceed the value of the thing repaired. — Also termed constructive loss. [Cases: Insurance 2176. C.J.S. Insurance § 1103.] 2.Marine underwriting. According to the traditional American rule, such serious damage to the insured property that the cost of repairs would exceed half the value of the thing repaired. See total loss. [Cases: Insurance 2236. C.J.S. Insurance §§ 1216, 1218–1220.]
direct loss.A loss that results immediately and proximately from an event. Cf. consequential loss.
disaster loss.A casualty loss sustained in a geographic area that the President designates as a disaster area. • It may be treated as having occurred during the previous tax year so that a victim may receive immediate tax benefits.
economic loss.See ECONOMIC LOSS.
extraordinary loss.A loss that is both unusual and infrequent, such as a loss resulting from a natural disaster.
general average loss.Marine underwriting. A loss at sea usu. incurred when cargo is thrown overboard to save the ship; a loss due to the voluntary and intentional sacrifice of part of a venture (usu. cargo) to save the rest of the venture from imminent peril. • Such a loss is borne equally by all the interests concerned in the venture. See AVERAGE(3). [Cases: Insurance 2240. C.J.S. Insurance §§ 1198, 1206.]
hobby loss.A nondeductible loss arising from a personal hobby, as contrasted with an activity engaged in for profit. • The law generally presumes that an activity is engaged in for profit if profits are earned during at least three of the last five years. IRC (26 USCA) § 183. [Cases:
Internal Revenue 3396, 3397.] indirect loss.See consequential loss.
long-term capital loss.A loss on a capital asset held for an extended period, usu. at least 12
months. [Cases: Internal Revenue 3260. C.J.S. Internal Revenue § 127.] net loss.The excess of all expenses and losses over all revenues and gains.
net operating loss.The excess of operating expenses over revenues, the amount of which can be deducted from gross income if other deductions do not exceed gross income. — Abbr. NOL. [Cases: Internal Revenue 3399. C.J.S. Internal Revenue § 200.]
ordinary loss.Tax. A loss incurred from the sale or exchange of an item that is used in a trade or business. • The loss is deductible from ordinary income, and thus is more beneficial to the taxpayer than a capital loss.
out-of-pocket loss.The difference between the value of what the buyer paid and the market value of what was received in return. • In breach-of-contract cases, out-of-pocket loss is used to measure restitution damages. [Cases: Fraud 59(3).]
paper loss.A loss that is realized only by selling something (such as a security) that has decreased in market value. — Also termed unrealized loss. partial loss.A loss of part of the insured property; damage not amounting to a total loss. Cf. total loss. [Cases: Insurance 2177. C.J.S. Insurance § 1104.]
particular average loss.Marine underwriting. A loss suffered by and borne alone by particular interests in a maritime venture. • Such a loss is usu. a partial loss. [Cases: Insurance 2241. C.J.S. Insurance §§ 1199–1203, 1208, 1211–1214.]
passive loss.A loss, with limited tax deductibility, from an activity in which the taxpayer does not materially participate, from a rental activity, or from a tax-shelter activity. [Cases: Internal Revenue 3418. C.J.S. Internal Revenue § 199.]
pecuniary loss.A loss of money or of something having monetary value. [Cases: Damages 1. C.J.S. Damages §§ 1–2, 4–6.]
progressive loss. 1. Loss that spreads or becomes more expensive to repair over time. 2. Late-manifesting harm that is related to an event that caused immediate harm, worsens over time, and is not catalyzed by any additional causative agent. • A classic example is asbestosis, a disease that manifests long after exposure to asbestos fibers.
recognized loss.Tax. The portion of a loss that is subject to income taxation. IRC (26 USCA) § 1001(c).
salvage loss. 1. Generally, a loss that presumptively would have been a total loss if certain services had not been rendered. 2.Marine underwriting. The difference between the salvage value, less the salvage charges, and the original value of the insured property. [Cases: Insurance 2233.]
total loss.The complete destruction of insured property so that nothing of value remains and the subject matter no longer exists in its original form. • Generally, a loss is total if, after the damage occurs, no substantial remnant remains standing that a reasonably prudent uninsured owner, desiring to rebuild, would use as a basis to restore the property to its original condition. — Also termed actual total loss. Cf. partial loss; constructive total loss. [Cases: Insurance 2175. C.J.S. Insurance § 1103.]
unrealized loss.See paper loss.
[Blacks Law 8th]