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Posted by Barry Margolin on May 15, 2008, 9:28 pm
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> My interest wrote:
>
> >
> >>
> >>>If I had $3000 short-term capital loss and $3000 long term capital
> >>>gain, what will be my net position?
> >>
> >>Zero.
> >>
> >>You'll have a $3000 loss in Part I of Sched D, a $3000 gain
> >>in Part II of Sched D, and they'll net to zero in Part III
> >>of Sched D, and on Form 1040.
> >>
> >
> >
> > So does this mean that you can benefit from favorable lower rate on
> > long term capital gains only if you have a net combined profit?
>
> Well, that's one way to view it, I guess. A loss of $3K short or long
> will wipe out the LT gain. If you took the loss in year 1 and gain in
> year 2, you'd be ahead. The loss would go against ordinary income, and
> the gain would be long term. I'd warn, however, again letting the tax
> tail wag the investing dog. Delay the gain and the gain may just
> evaporate. Of course this decision becomes easier as December starts to
> close in.
> Joe
Another way to view it is that if you've sold some securities at a loss,
you can take some gains this year, and you won't be taxed on them, up to
the amount of your losses. Because the losses offset any types of
gains, you can safely take short-term gains if you want.
--
Barry Margolin, barmar@alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***
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