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Author: ngcpa Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120812  
Subject: Capital losses Date: 3/9/2012 1:32 PM
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I am a reired CPA and haven't done any taxes (except my own) for about 4 years now. I bought TurboTax Premier and have been fooling with it. It seems to me it does not handle deducting capital losses correctly in the following situation:
Suppose you have $ 5,000 in net capitsl losses, you have $ 11,950 in interest income, are over 65, and do not itemize deductions. You will have no tax, since the standard deduction ($ 7,250) + the exemption ($ 3,700) is $ 10,950 and your income is only $ 8,950 ($ 11,950 - $ 3,000 capital loss). However according to TurbTax, you will use the entire $ 3,000 of capital loss and carryover only $ 2,000 to 2012. I would think you should only have to use $ 2,000 of your capital loss to offset your income and could carry forward $ 3,000 of capital losses. I believe that is the way the tax software I used to use would handle it. I admit that TurboTax costs < 5% of what I used to pay for my old software. Am I right on this?
Norm
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