When can losses from items that are considered capital assets be claimed?

Losses from capital assets can typically be claimed only if they are associated with business assets. Capital assets include items such as stocks, bonds, and real estate, but the rules governing the claiming of losses vary depending on the context in which these assets are held. For personal capital assets, losses can only be recognized for tax purposes when the asset is sold.

When a business holds capital assets, it can claim losses against its income, thereby potentially reducing its taxable income for the year of the sale. This is based on the idea that the losses incurred from the sale of these assets can offset the profits generated through business operations, thus providing a more accurate reflection of the business's financial performance.

Other contexts mentioned, such as claiming losses during bankruptcy or those that can only be recognized during real estate transactions, do not generally apply to the broader classification of capital losses as recognized in a business context. As such, the option that capital losses can be claimed only for business assets aligns correctly with the regulations governing capital asset transactions.