Short Term Loss Rules Today?

Taxes General Forum - Tax professionals meeting place and answers to queries. (Moderated) 

Yahoo!   Google   Windows Live   del.icio.us   digg   Netscape

Subject Author Date Short Term Loss Rules Today? Ron Hardin 07-18-2008  Re: Short Term Loss Rules Today? Paul Thomas, CPA 07-18-2008  Re: Short Term Loss Rules Today? Rich Carreiro 07-18-2008  Re: Short Term Loss Rules Today? Seth 07-19-2008  Re: Short Term Loss Rules Today? Mark Bole 07-19-2008
Posted by Ron Hardin on July 18, 2008, 9:21 am Please log in for more thread options Does a net short term loss, after cancelling long term gains, still offset ordinary income dollar for dollar up to $3000? Or is it some other rule today. I'm wondering if it's worth selling before a year to protect the short-term nature of the loss. I've been out of this for two decades and who knows what's been changed. -- rhhardin@mindspring.com On the internet, nobody knows you're a jerk. -- << ------------------------------------------------------- >> << 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. >> << ------------------------------------------------------- >> Posted by Paul Thomas, CPA on July 18, 2008, 11:14 am Please log in for more thread options > Does a net short term loss, after cancelling long > term gains, still offset ordinary income dollar > for dollar up to $3000? Yup. Any remaining capital loss gets carried forward. -- Paul A. Thomas, CPA Watkinsville, Georgia -- << ------------------------------------------------------- >> << 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. >> << ------------------------------------------------------- >> Posted by Rich Carreiro on July 18, 2008, 11:21 am Please log in for more thread options > Does a net short term loss, after cancelling long > term gains, still offset ordinary income dollar > for dollar up to $3000? Yes. But so do long-term losses after cancelling short-term gains. The algorithm is: (a) combine ST gains and ST losses to get net ST gain (loss). (b) combine LT gains and LT losses to get net LT gain (loss). (c) combine net ST gain (loss) with net LT gain (loss) to get net capital gain (loss). (d) if there is a net capital gain, the whole gain goes on 1040 and the LT piece of it (if any) is taxed at the special LT rates via the cap gains worksheet. (e) if there is a net capital loss, the loss (but no more than $3000 of loss) goes on 1040 and offsets ordinary income. (f) The excess loss is carried over to next year, and retains its sub-characters (the ST and LT portions of the loss are carried over separately) -- Rich Carreiro rlc-news@rlcarr.com -- << ------------------------------------------------------- >> << 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. >> << ------------------------------------------------------- >> Posted by Seth on July 19, 2008, 6:09 pm Please log in for more thread options >(e) if there is a net capital loss, the loss (but no more > than $3000 of loss) goes on 1040 and offsets ordinary income. >(f) The excess loss is carried over to next year, and retains its > sub-characters (the ST and LT portions of the loss are carried > over separately) If there is both LT and ST loss, which does the $3000 used against ordinary income come from? Seth -- << ------------------------------------------------------- >> << 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. >> << ------------------------------------------------------- >> Posted by Mark Bole on July 19, 2008, 8:15 pm Please log in for more thread options Seth wrote: > >> (e) if there is a net capital loss, the loss (but no more >> than $3000 of loss) goes on 1040 and offsets ordinary income. >> (f) The excess loss is carried over to next year, and retains its >> sub-characters (the ST and LT portions of the loss are carried >> over separately) > > If there is both LT and ST loss, which does the $3000 used against > ordinary income come from? I'm pretty sure this must be in the group archives, but anyway, first against ST, then LT. -Mark Bole -- << ------------------------------------------------------- >> << 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. >> << ------------------------------------------------------- >> Similar Threads Posted Have a question about carryover short term vs long term capital loss October 11, 2007, 10:19 pm Dividing up proceeds between long-term and short-term portion of a stock sale January 29, 2009, 9:13 pm long term versus short term capital losses... September 5, 2007, 10:58 am Long Term and Short Term Capital Gains For Businesses January 23, 2008, 10:52 pm 1099-B question regarding long-term and short-term sales February 5, 2008, 1:33 pm recharacterizing gain from short-term to long-term increases tax, what to do! April 7, 2008, 4:17 pm do short term gains offset long term losses December 10, 2008, 11:46 am Short-term, long-term, spinoff February 2, 2007, 7:56 pm Short term or long term? December 28, 2007, 3:29 pm Short Term gain vrs long term gain on sale of a rental house April 11, 2006, 3:31 am