Given that you can deduct up to $2000 per year due to capital losses, for those that can afford it, wouldn't it makes sense to take at least $2000 per year to invest in a high risk portfolio? It seems to me that this greatly reduces risk because you are guaranteed (and this is the area I am trying to confirm) to not lose all of this money due to the fact that even a complete loss of this investment will reduce your AGI by $2000, which, in turn, will result in less taxes owed or a greater refund. Obviously, the impact and the efficacy of this approach depends upon your tax bracket. Actually, the net capital loss you can deduct is $3,000 ($1,500 if married filing separately), not $2,000, but otherwise, your point is correct. However, you can actually deduct much larger losses as long as you have capital gains to offset them. It's only the NET capital loss that can't be deducted in one year if it exceeds $3,000. Also, don't forget that if your net capital loss exceeds $3,000, you can carry the excess loss forward.Angelbuggy, E.A.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Rat