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Author: amac11 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: end of year sale of loser Date: 12/30/1999 4:43 PM
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I have a question I can't find an answer to so I'm turning to all you Fools out there for a little help.

My question is this: I have a carryover loss from last year since I sold a stock in '98 at a loss in excess of the $3000 allowed. I want to dump another loser (CPU if you must know - doesn't look like it's getting better any time soon) and I'm trying to decide whether I should do it before the end of the year. I know I'm getting to this a bit late. If I sell before the end of the year can I take the loss and add my carryover to it to reduce my AGI or am I limited to the one loss for the year? What if the total of the two losses (the carryover and the new loss) exceed $3K? Do I only get to deduct the $3K (therefore having another carryover for the next year) or since they're two different losses can the total excce $3K? Any help is appreciated. And if you can point me to the right place to find the answer I'd appreciate that, too. I looked through the FAQs, etc. and couldn't find any info on this specific scenario. Thanks and Happy New Year to all Fools out there.

AMAC11
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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 24115 of 121219
Subject: Re: end of year sale of loser Date: 12/30/1999 5:08 PM
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<<I have a question I can't find an answer to so I'm turning to all you Fools out there for a little help.>>

Glad to have you in the folder.

<<My question is this: I have a carryover loss from last year since I sold a stock in '98 at a loss in excess of the $3000 allowed. I want to dump another loser (CPU if you must know - doesn't look like it's getting better any time soon) and I'm trying to decide whether I should do it before the end of the year.>>

OK...

<< I know I'm getting to this a bit late. If I sell before the end of the year can I take the loss and add my carryover to it to reduce my AGI or am I limited to the one loss for the year?>>

Nope...you're not limited. They all get combined and turned into one big loss.

<< What if the total of the two losses (the carryover and the new loss) exceed $3K? Do I only get to deduct the $3K (therefore having another carryover for the next year)>>

Yup...you'll still be required to comply with the $3k annual limit...even if your combined losses are greater than $3k. If they are, you'll have another carryover.

<< or since they're two different losses can the total excce $3K? Any help is appreciated.>>

Nope...makes no difference that they are two separate losses. They all get combined.

<< And if you can point me to the right place to find the answer I'd appreciate that, too. >>

Well...in the post just before yours, ptheland (a terrific participating Fool) penned an article dealing with capital gains, losses, and netting. Try clicking on the following link to get you there (gee...I hope that this works)...

http://boards.fool.com/Message.asp?id=1040014007125000&sort=id

If this DOESN'T work...then just simply go to post #24110 and read all about how the rules work.

TMF Taxes
Roy

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Author: Bob78164 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 24116 of 121219
Subject: Re: end of year sale of loser Date: 12/30/1999 5:09 PM
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amac11 writes (in part):

If I sell before the end of the year can I take the loss and add my carryover to it to reduce my AGI or am I limited to the one loss for the year? What if the total of the two losses (the carryover and the new loss) exceed $3K? Do I only get to deduct the $3K (therefore having another carryover for the next year) or since they're two different losses can the total excce $3K?

I reply:

Only the final numbers matter, not how many transactions it took you to get there. Thus, you may add your net capital losses to your carryover to reduce your AGI. However, this reduction is still subject to the $3000 per year limitation, so if the sum of your carryover and this year's loss exceeds $3000, you will indeed have another carryover.

Check out post no. 24110 for a very thorough explanation of the capital gains calculation. --Bob

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Author: amac11 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 24140 of 121219
Subject: Re: end of year sale of loser Date: 12/30/1999 10:43 PM
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Thanks for the help. I scanned through #24110 prior to posting my message. I guess I was asleep at the keyboard and missed it. Thanks for pointing me back there. I reread it and see how it applies to my situation. Gotta get the year end stuff wrapped up. Again, thank for the help.

AMAC11

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