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Author: skisheekee Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121185  
Subject: first time capital gains filer Date: 12/16/2001 6:08 PM
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Hello: I started a portfolio in January 2001 with 4 securities. I sold one of them in June which then became activated, and then bought another which I have been holding ever since that June sale. I have been filing single on the 1040EZ all of my life. I am taking an overall loss on my capital gains seeing that I have gains on two and a slight more loss on the other two. My question is since I started in January, are the three securities that I have not sold considered short term or long term because I do not plan on selling them within the next 6 months, and do I still fill out schedule D seeing that I am taking an overall loss and am not itemizing. Thank you for your response.
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Author: NaggingFool Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 56052 of 121185
Subject: Re: first time capital gains filer Date: 12/16/2001 6:47 PM
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I'm a little bit confused by your message. Let me see if I have this straight.
You bought 4 different stocks in January.
You sold one stock in June.
You bought another stock in June.

So you only sold one stock in 2001.

Since you held that stock for less than a year it was short term. (I don't know if that was a gain or a loss because you didn't say if you sold it for more or less than you bought it for.)

Every time you sell a stock it's relevent for tax purposes. If you sold that stock for less than you paid for it it's a loss. If you sold it for more than you paid for it it's a gain.

What confuses me is your statement "overall loss". If you've only sold one stock that's the only amount that matters on your taxes. You don't report the stocks that you didn't sell on your taxes.

So let us know if I'm reading your message right and if you have a gain or a loss on the stock you sold, and then we can help you figure out what to do with the tax forms.

-Megan



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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 56060 of 121185
Subject: Re: first time capital gains filer Date: 12/17/2001 1:50 AM
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Hello: I started a portfolio in January 2001 with 4 securities.

Congratulations on beginning your investment history. It's not too late to learn about the tax implications.

It's clear from your post that you don't really understand how the taxation of capital gains works. Please take the time to read the "Investment Issues" part of the FAQ. You'll get a lot of valuable information, and it's always better to know the effects of your actions before you act.

Phil Marti

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Author: skisheekee Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 56083 of 121185
Subject: Re: first time capital gains filer Date: 12/17/2001 6:25 PM
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yes I did take a loss on the 1 stock I sold in 2001, since I am just using the standard deduction, do I still use Schedule D? or can I still use form 1040EZ. Thanks.

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Author: RoseSmeller One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 56090 of 121185
Subject: Re: first time capital gains filer Date: 12/17/2001 10:05 PM
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Author: skisheekee
yes I did take a loss on the 1 stock I sold in 2001, since I am just using the standard deduction, do I still use Schedule D? or can I still use form 1040EZ. Thanks.


Sorry, no 1040EZ for you this year. You'll have to use form 1040 and the Schedule D. But don't worry, it's not that bad. You'll just fill in the same information as on the 1040EZ plus your capital loss. You can ignore the spaces for filling in other things that don't apply to you (assuming that's the only change in your tax situation this year).


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