§ 26-51-424 - Deductions -- Losses. - Arkansas Statutes

26-51-424. Deductions -- Losses.

(a) (1) In computing net income there shall be allowed as a deduction any loss sustained during the income year and not compensated for by insurance or otherwise.

(2) In the case of an individual, the deduction under subdivision (a)(1) of this section shall be limited to:

(A) Losses incurred in a trade or business; or

(B) Losses incurred in any transaction entered into for profit, though not connected with the trade or business.

(b) Sections 165(h) and 165(i) of the Internal Revenue Code of 1986, as in effect on January 1, 2009, regarding losses arising from a casualty or a disaster, are adopted for the purpose of computing Arkansas income tax liability.

(c) Section 183 of the Internal Revenue Code of 1986, as in effect on January 1, 1999, regarding hobby losses, is adopted for the purpose of computing Arkansas income tax liability.