Message Font: Serif | Sans-Serif
No. of Recommendations: 0
This subject may well have been dealt with previously, but I can't find the answer so here goes.

For an active trader it doesn't take to many months to conceivably reach the $3000 limit. You may be up overall by $10,000, but lots of small losses can add up.

For instance, let's say you've lost a total of $3000 and gained $3000. Right now you're breaking even on the year. Net $0.00. Now you make a trade and lose another $500, then you make yet another trade and gain $500. Now you've lost $3500 on the year, but are still breaking even on the year. Net still $0.00. At this point do you owe taxes (short term capital gains) on that last $500 gain, even though you're net is $0.00?
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.