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Posted by alphaga321 on July 26, 2008, 12:09 pm
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I had the amount gain $60,000 of long and short terms from the stock
market in 2007. And I have filed the extension for 2007 return. I had
the loss $13,000 in 2000 and claimed the loss in Schedule D and
deducted $3000 for the year 2000’s tax return. But the 2000’s loss
($13000-$3000 = $12700) have never been carried for the years after
2000. I did not trade till 2006, I lost $17,000 for 2006 and I did not
claim the loss on the 2006 return.
After having the 2000’s trades rechecked I have realized that I had
lost $30,000 instead of $13,000 which had been reported to IRS. I
understood IRS would not allow us file AMENDED 1040x before 2005 due
to the 3 years statue.
But I want to subtract the correct loss of 2000 and the loss of 2006
from the gain made in 2007. And pay IRS what I owe. I would like to
file 1040x for the correction on the Schedule D of 2006 with the loss
from 2006 and the loss carried over from 2000. And I will attach all
the document such as 1099, transaction records. Will IRS accept the
correction on 2000’s?
TIA
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Posted by Phil Marti on July 26, 2008, 1:41 pm
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>I had the amount gain $60,000 of long and short terms from the stock
> market in 2007. And I have filed the extension for 2007 return. I had
> the loss $13,000 in 2000 and claimed the loss in Schedule D and
> deducted $3000 for the year 2000’s tax return. But the 2000’s loss
> ($13000-$3000 = $12700) have never been carried for the years after
> 2000.
Math error. After your 2000 return you had a $10,000 capital loss
carryover.
Legal error. You don't get a choice regarding when you use the carryover.
Whether you traded or not during the ensuing years, if you had enough income
from other sources you used the carryover as follows:
2001: $3,000 used, $7,000 remaining
2002: $3,000 used, $4,000 remaining
2003: $3,000 used, $1,000 remaining
2004: $1,000 used, zero remaining
It's too late to file amended returns for any of those years unless the
original was filed less than 3 years ago (possible for a 2004 filed on
extension).
> I did not trade till 2006, I lost $17,000 for 2006 and I did not
> claim the loss on the 2006 return.
Amend your 2006 to claim the loss and establish your carryover. If you
don't the IRS is going to be after you for tax on the gross proceeds of the
sale(s).
> After having the 2000’s trades rechecked I have realized that I had
> lost $30,000 instead of $13,000 which had been reported to IRS. I
> understood IRS would not allow us file AMENDED 1040x before 2005 due
> to the 3 years statue.
Correct
> But I want to subtract the correct loss of 2000 and the loss of 2006
> from the gain made in 2007. And pay IRS what I owe.
I want to hit the lottery. Neither of us is likely to succeed.
> I would like to
> file 1040x for the correction on the Schedule D of 2006 with the loss
> from 2006 and the loss carried over from 2000. And I will attach all
> the document such as 1099, transaction records. Will IRS accept the
> correction on 2000’s?
No. It's too late to change your 2000 return. Amend the 2006 reporting
your 2006 sales, then proceed with the resulting carryover to 2007.
If during the intervening years since 2000 you had negative taxable income
after applying that year's $3,000 carryover you might have more of the 2000
carryover left as of 2004, but it's too late to change the amount of the
2000 loss.
--
Phil Marti
Clarksburg, MD
--
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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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Posted by Seth on July 27, 2008, 1:44 pm
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>>I had the amount gain $60,000 of long and short terms from the stock
>> market in 2007. And I have filed the extension for 2007 return. I had
>> the loss $13,000 in 2000 and claimed the loss in Schedule D and
>> deducted $3000 for the year 2000’s tax return.
>It's too late to file amended returns for any of those years unless the
>original was filed less than 3 years ago (possible for a 2004 filed on
>extension).
No, it isn't. It's too late to get a _refund_ for the amendment.
>> After having the 2000’s trades rechecked I have realized that I had
>> lost $30,000 instead of $13,000 which had been reported to IRS. I
>> understood IRS would not allow us file AMENDED 1040x before 2005 due
>> to the 3 years statue.
>
>Correct
No. He can file, just not get a refund.
>> But I want to subtract the correct loss of 2000 and the loss of 2006
>> from the gain made in 2007. And pay IRS what I owe.
>
>I want to hit the lottery. Neither of us is likely to succeed.
He's more likely.
He'll have to refile every year from 2000 on, using up $3,000 of the
capital loss carryforward each year.
Seth
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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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Posted by LoTax on July 27, 2008, 1:53 pm
Please log in for more thread options > But I want to subtract the correct loss of 2000 and the loss of 2006
> from the gain made in 2007. And pay IRS what I owe.
And Phil responds: "I want to hit the lottery. Neither of us is
likely to succeed."
I think just the opposite. (No, Phil, you won't hit the lottery) I
think that alphaga can change his returns, no matter how much time has
passed. The three-year statute of limitations prohibits *getting a
credit or refund* from amending a return. It does not/should not stop
you from correcting mistakes on returns, especially when they affect
your carryovers to subsequent years.
I didn't pay enough attention to alphaga's details to be able to tell
him exactly what he can do about correcting the earlier year losses,
but I'm pretty sure that he can amend "early* returns, and that he
*should* amend them, when the changes will affect - favorably affect -
*later* returns. Be prepared, however, to defend the earlier years'
returns, if the IRS challenges them!
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Phil Marti on July 27, 2008, 2:12 pm
Please log in for more thread options "LoTax" wrote:
> I didn't pay enough attention to alphaga's details to be able to tell
> him exactly what he can do about correcting the earlier year losses,
> but I'm pretty sure that he can amend "early* returns, and that he
> *should* amend them, when the changes will affect - favorably affect -
> *later* returns. Be prepared, however, to defend the earlier years'
> returns, if the IRS challenges them!
Since it appears we've all done the same amount of research (none) I have no
problem agreeing to a "why not?" approach to amending 2000, the only
"closed" year in which the capital loss realized during the year was
misstated. IRS accepts it or doesn't, and OP proceeds as he wishes.
I see no point to amending returns that didn't use the carryover if no
refund for those years is possible because it's barred by statute. Seems to
me that OP could just do a worksheet adjustment to the carryover for those
years to carry him to the point that refunds from amended returns would be
allowed.
--
Phil Marti
Clarksburg, MD
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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