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Posted by TB on April 25, 2008, 8:02 am
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I have a question on incorrect capital loss carryover:
Suppose I have a capital loss carryover from last year of $10,000. I
have a gain this
year of $1000, and after claiming $3000, I should have a carryover of
<6000> to
next year.
I make a mistake and forget to claim another $1000 gain, which
only affects the
carryover to next year. Will the IRS penalize me if I get audited?? It
doesn't seem so
as I incurred no new tax because of the mistake.
Thanks, Tom B.
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Posted by Ernie Klein on April 25, 2008, 10:03 am
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In article
> I have a question on incorrect capital loss carryover:
>
> Suppose I have a capital loss carryover from last year of $10,000. I
> have a gain this
> year of $1000, and after claiming $3000, I should have a carryover of
> <6000> to
> next year.
> I make a mistake and forget to claim another $1000 gain, which
> only affects the
> carryover to next year. Will the IRS penalize me if I get audited?? It
> doesn't seem so
> as I incurred no new tax because of the mistake.
Probably not, but you should file an amended return right away (with a
corrected schedule D attached) before you do get audited - and you can
be sure that you will get audited but it could take a year or more.
If the capital gains was reported on a 1099 form, the IRS's computers
will eventually match that against your return and you will receive a
computer generated letter asking you to explain the difference (audit).
--
-Ernie-
--
<< ------------------------------------------------------- >>
<< 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 removeps-groups@yahoo.com on April 25, 2008, 12:24 pm
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> Suppose I have a capital loss carryover from last year of $10,000. I
> have a gain this
> year of $1000, and after claiming $3000, I should have a carryover of
> <6000> to
> next year.
> I make a mistake and forget to claim another $1000 gain, which
> only affects the
> carryover to next year. Will the IRS penalize me if I get audited?? It
> doesn't seem so
> as I incurred no new tax because of the mistake.
There won't be a penalty, because if you did get a CP2501 letter, you
would use up $1000 of the unclaimed capital loss carryover. However,
you should file an amended return (but no rush on it, meaning you can
take 3 months to do it) because:
(1) So your capital loss carryover to the following year is correct.
In reality your capital loss carryover to the next year is $5000 but
in your original return you have it as $6000. If in your 2008 tax
return you use up the $6000, then when you get the CP2501 letter for
your 2007 return, you will write back with an amended return claiming
an additional $1000 gain on Schedule D (which is what the CP2501
letter is for), but you will also use up an additional $1000 of your
capital loss carryover. But then on your 2008 return you might owe
interest because you claimed $6000 capital loss but should have
claimed $5000. So basically, get your accounting straight before the
end of 2008 just to save hassle down the road.
(2) So you don't have to deal with the CP2501.
--
<< ------------------------------------------------------- >>
<< 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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