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Financial Planning / Tax Strategies


Subject:  Re: Stock losses Date:  11/15/2012  9:00 PM
Author:  irasmilo Number:  116923 of 127907

I have to sell a stock at a long term loss. I am in the 15% tax bracket. How long do I have to wait to rebuy the stock? Also is my income deducted dollar for dollar on my taxes if I have no capital gains to report? Also am I only allowed to report $3000 in losses per year and then carry over the rest to 2013 taxes? I will be taking a $6000-$7000 dollar loss on my investment. Thank you.

In order to avoid a wash sale, you cannot purchase identical replacement shares within 30 days before and after the sale date. That is, if you sell first, you can buy back on the 31st day.

The net capital loss (in your case, the total capital loss) is deducted dollar for dollar against your other income up to a maximum of $3000. Any additional loss is carried forward and used each year until it is totally used or you die.

Technically, you report all of the loss this year, but there is a worksheet that limits the amount you can deduct to $3000.

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