Capital Loss, confirming how to file 1040

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blueman457
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Capital Loss, confirming how to file 1040

Post by blueman457 » Fri Oct 19, 2018 1:28 pm

I started my first significant taxable account this year, and I only have international in that account. Loss is about $1500 (almost 10%). These would all be short-term losses. If I decide to sell all my international this year, I could claim $1500 in capital losses on my 1040 Schedule D.

1. Does that reduce my taxable income by $1500?

2. Is ok to sell my international?

Blue Man

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FiveK
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Re: Capital Loss, confirming how to file 1040

Post by FiveK » Fri Oct 19, 2018 1:29 pm

1. Yes.

2. What do you mean by "ok"?

blueman457
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Re: Capital Loss, confirming how to file 1040

Post by blueman457 » Fri Oct 19, 2018 1:36 pm

FiveK wrote:
Fri Oct 19, 2018 1:29 pm
1. Yes.

2. What do you mean by "ok"?
I guess: are there reasons NOT to sell given the parameters?

Thanks,

Blue Man

Gill
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Re: Capital Loss, confirming how to file 1040

Post by Gill » Fri Oct 19, 2018 1:36 pm

It reduces your gross income by $1,500, not necessarily your taxable income.
Gill

backslash2718
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Re: Capital Loss, confirming how to file 1040

Post by backslash2718 » Fri Oct 19, 2018 1:38 pm

blueman457 wrote:
Fri Oct 19, 2018 1:28 pm
2. Is ok to sell my international?
Why not re-buy a similar international position? You just need to be careful about the tax loss harvesting/wash sale rules.
Here's a link on the wiki: https://www.bogleheads.org/wiki/Tax_loss_harvesting

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FiveK
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Re: Capital Loss, confirming how to file 1040

Post by FiveK » Fri Oct 19, 2018 1:47 pm

blueman457 wrote:
Fri Oct 19, 2018 1:36 pm
FiveK wrote:
Fri Oct 19, 2018 1:29 pm
2. What do you mean by "ok"?
I guess: are there reasons NOT to sell given the parameters?
There are defensible reasons to sell a position with unrealized losses (e.g., tax loss harvesting, or a fundamental change in one's investment policy, etc.).
There are defensible reasons not to sell such a position (e.g., avoid the slippery slope down to market timing, etc.).

It's up to you.

rkhusky
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Re: Capital Loss, confirming how to file 1040

Post by rkhusky » Fri Oct 19, 2018 6:11 pm

blueman457 wrote:
Fri Oct 19, 2018 1:28 pm
1. Does that reduce my taxable income by $1500?
It would first be applied to reduce capital gains, then, if there is any left, it would be applied against income.

TravelforFun
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Re: Capital Loss, confirming how to file 1040

Post by TravelforFun » Fri Oct 19, 2018 6:30 pm

blueman457 wrote:
Fri Oct 19, 2018 1:28 pm
2. Is ok to sell my international?

Blue Man
If you didn't have it, would you buy it? If you wouldn't, then sell.

TravelforFun

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LadyGeek
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Re: Capital Loss, confirming how to file 1040

Post by LadyGeek » Fri Oct 19, 2018 6:55 pm

This thread is now in the Personal Finance (Not Investing) forum (taxes).
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livesoft
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Re: Capital Loss, confirming how to file 1040

Post by livesoft » Fri Oct 19, 2018 8:15 pm

How to file Form 1040 is somewhat described in this thread (with screen captures):
viewtopic.php?t=179414
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