Short term losses to offset short term gains

[corn18]

I have short term losses of $9,800 this year. I also have short term gains of $11,000. I googled this and from what I can tell, I can use all of the $9,800 loss to offset part of the $11,000 gain and will have a net $1,200 short term gain that will be taxable. Do I have this right? My cornfusion stems from the $3,000 limit, but from what I read, this applies to ordinary income.

[HomeStretch]

You are right.

If you had short term capital losses of $10,000 and short term gains of $6,000 (and no long term gains/losses), $6,000 of losses would offset the gains of $6,000, then $3,000 of the loss would offset ordinary income and the remaining loss of $1,000 would carry forward. I can’t recall if there is any carryback provision.

[kaneohe]

https://www.irs.gov/pub/irs-pdf/f1040sd.pdf

check out sch D........in pt I, you net ST gains/losses against each other; in pt II, you net LT gains/losses;
in Pt III, you net ST against LT; then if you have a net loss, the 3K limitation comes into play on line 21.

[BL]

Maybe you can find some long-term losses if you have something like specific id basis. They would off-set short-term gains after off-setting any long-term gains.

[Wiggums]

https://www.irs.gov/pub/irs-pdf/f1040sd.pdf

check out sch D........in pt I, you net ST gains/losses against each other; in pt II, you net LT gains/losses;
in Pt III, you net ST against LT; then if you have a net loss, the 3K limitation comes into play on line 21.

+1.

[corn18]

Awesome sauce! Thanks everyone, this helps for tax planning.

[rossington]

Awesome sauce! Thanks everyone, this helps for tax planning.

Why not offset the gains with the exact loss amount and let the remaining $1,200 ride until it qualifies as a long term gain? Or won't that work?

[lakpr]

Awesome sauce! Thanks everyone, this helps for tax planning.

Why not offset the gains with the exact loss amount and let the remaining $1,200 ride until it qualifies as a long term gain? Or won't that work?

Sounds like it is a done deal (gains and losses already realized), not a proposal

[corn18]

Awesome sauce! Thanks everyone, this helps for tax planning.

Why not offset the gains with the exact loss amount and let the remaining $1,200 ride until it qualifies as a long term gain? Or won't that work?

Sounds like it is a done deal (gains and losses already realized), not a proposal

Affirmative.

[rossington]

Awesome sauce! Thanks everyone, this helps for tax planning.

Why not offset the gains with the exact loss amount and let the remaining $1,200 ride until it qualifies as a long term gain? Or won't that work?

Sounds like it is a done deal (gains and losses already realized), not a proposal

Affirmative.

Understood.