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Author: AhabIshmael One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121572  
Subject: offsetting short-term cap loss Date: 3/9/1998 3:22 AM
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In the middle of last year I found MF to my great delight. I decided I wanted to put my personal monies in UG5 (the rest of my money is in a 403B account which can only be in mutual funds). UG5 didn't do too well in the latter half of '97, and I took quite a few short-term cap losses. When I add up all my short-term cap gains and losses for my stocks in '97, it adds up to a net loss of $6,000. (UG5 has since done fine and my portfolio has gained all this back so far in 98; but those '97 losses came from stocks that were sold in '97.)

Is there any possible way to offset this short-term cap loss? I had a $2,000 gain from Treasuries I held in the first half of '97; can these offset each other? Can I somehow carry-over this short-term loss in '97 to offset my (hopefully) larger gains from sales of my UG5 stocks in '98???

Sorry for my extremely-neophyte questions; but 97 was the first year I've held stocks; so I am an extreme-neophyte as regards stock tax strategies.

Thanks for your advice.
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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: 2527 of 121572
Subject: Re: offsetting short-term cap loss Date: 3/9/1998 11:16 AM
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[[s there any possible way to offset this short-term cap loss? I had a $2,000 gain from Treasuries I
held in the first half of '97; can these offset each other? Can I somehow carry-over this short-term
loss in '97 to offset my (hopefully) larger gains from sales of my UG5 stocks in '98???]]

The only way that you can offset capital losses is with capital gains. If you have no offsetting gains for 1997, it is certainly too late now to create some. But the good news is that you can deduct $3k of those net losses against your other "ordinary" income in 1997...and will be able to carry the remaining $3k over to tax year 1998 in order to offset 1998 tax gainers.

For additional information on how Stock gains and losses work, see IRS Publciation 550. Also review Schedule D and instructions.

TMF Taxes
Roy

SPECIAL NOTE: I try to answer as many questions as I can each week, and I generally select those that have not been asked before. If you don't get a detailed answer to your question, it is probably because my time is so limited during tax season, or because it has already been asked and answered in this folder in the past, or because it has been discussed in the Taxes Frequently Asked Questions area. In order to visit the Taxes FAQ area, go to the Fool's School area (http://www.fool.com/school.htm) and check out "Other Features" in the list box, OR you can jump directly to the Taxes FAQ area (http://www.fool.com/school/taxes/taxes.htm). Additionally, if any references were made to the IRS Web Site, you can get there by pointing your web browser to (http://www.irs.ustreas.gov)


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