capital loss

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ketanco
Posts: 130
Joined: Wed Jul 24, 2013 7:09 pm

capital loss

Post by ketanco » Tue Oct 21, 2014 12:57 pm

i have a basic question. i have an online trading account where i trade stocks. i think that the max capital loss you can claim for a year is $3000

so, lets say, after several of my trades of various stocks, i have a total realized gains of $5000 and total realized losses of $4000

does it mean first 5000 and 4000 cancel each other, and then i have a net gain of 1000 and i am taxed on that 1000?

OR

does it mean i will be able to claim only 3000 loss this year so i will be taxed on 5000 - 3000 = 2000 this year while 1000 loss still remains to be claimed next year?

kaneohe
Posts: 6126
Joined: Mon Sep 22, 2008 12:38 pm

Re: capital loss

Post by kaneohe » Tue Oct 21, 2014 1:12 pm

see Sch D http://www.irs.gov/pub/irs-pdf/f1040sd.pdf

pt I. Short term gains/losses netted
pt II Long term gains/losses netted
pt III Short term/long term netted
see lines 16, 21 (limitations in line 21)

livesoft
Posts: 69764
Joined: Thu Mar 01, 2007 8:00 pm

Re: capital loss

Post by livesoft » Tue Oct 21, 2014 1:14 pm

Yes, if you have an account, you really MUST read the instructions for Schedule D and UNDERSTAND how to report your gains and losses. Then you can answer this question for people who ask it.
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Fclevz
Posts: 438
Joined: Fri Mar 30, 2007 11:28 am

Re: capital loss

Post by Fclevz » Tue Oct 21, 2014 4:33 pm

Capital losses offset capital gains dollar-for-dollar.
If you have losses after that, you can claim $3,000 of losses against ordinary income.
If you still have losses after that, you have a capital-loss-carryover to next years taxes.

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