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Posted by Harlan Lunsford on June 4, 2006, 12:54 am
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San Diego CPA wrote:
>> Bill wrote:
>>> gme6@cornell.edu (Seraphim) posted:
>>>> Here is my situation, I'm not quite sure what I
>>>> should do: In 2003 I had about $6800 in
>>>> losses on Schedule D. I claimed $3000. In
>>>> 2004 I had no income and did not file a federal
>>>> return Now, I don't know what to do with the
>>>> remaining $3800 from the 2003 Schedule D.
>>>> The Schedule D instructions say to refer to my
>>>> 2004 Schedule D, but I don't have one, so I
>>>> have no idea how much (if anything) I can
>>>> claim.
>>> The general understanding is that you must take at least
>>> $3,000 of any capital loss carryover in each succeeding
>>> year, whether you need it or not.
>>>
>>> The cite I would usually use, Pub 17, has an example and
>>> discussion on page 106 -- but I swear it's so opaque that
>>> _I_ couldn't use it (refers to a worksheet). But you could
>>> read the section on that page re: Capital Losses. It does
>>> support thte general understanding, so I'm sorry, but you
>>> probably used $3,000 of that carryover in 2004 -- even when
>>> you didn't need it, and without having to file.
>>>
>>> For your sake, I actually hope somebody comes along to
>>> refute that. Shucks. 'Course, you still have $800 left.
>> Duly refuted, Bill. If none of the 3800 was used in 2004,
>> and wasn't, since he had no income, the entire 3800 comes
>> forward and is available.
> Beware of state treatments. I picked up a client a few
> years ago that had a significant CA source capital loss upon
> disposition of a CA-based business activity that occurred 10
> years prior to my getting involved. Upon disposition of
> this business, his only remaining tie to CA was a parcel of
> land held for investment. Over the course of the following
> 10 years, he had no CA source income or expenses and filed
> no CA returns but continued to carryforward and utilize the
> capital loss for federal purposes. After about 10 years of
> no CA returns, he sold the property.
(break for emphasis)
> As no returns had been
> filed carrying forward that loss over the years in CA we had
> to attach a schedule to the return showing the annual $3,000
> capital loss carryforward utilization through the 10
> intervening years and only the remaing loss carryforward was
> availble to offset the gain on the sale of the property.
(end break)
> For
> our facts, it didn't matter but for many taxpayers, giving
> up $30,000 of loss carrryfoward could make a big difference!
> (the $3,000 may have been lower for CA purposes in prior
> years, I don't recall the details) >
As to the corrections you made, i.e. a schedule showing the
annual 3000 carryforwards...... are you saying that for each
of those years, CA required that 3000 be used with no
benefit? That's different from federal, which says in effect
"no need? not used."
but hey, that MAy just be KALH yee for nye yea"
ChEAR$,
Harlan Lunsford, EA n LA
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