Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Re: Capital loss utilization Date: 12/26/2004 1:45 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
There are only 5 trading days left in 2004.
I have just realized that while I have made nice gains YTD
in my 2004 tax return I will have large (150k) short term capital loses.


I'm not sure whether we're talking about a net $150K loss for 2004 or a $150K loss on disposing of your losers. If you don't already know about how gains and losses are netted on the Schedule D, check out the article in the FAQ.

If you are talking about a net $150K loss, you may indeed never use it up. The good news is that for the foreseeable future you'll owe no tax when you sell winners.

Some people think it's wise to sell winner/keepers and rebuy them, thus using up some of the loss. To me it doesn't make sense. You're incurring unnecessary fees, resetting the holding period, and accomplishing nothing for yourself except getting rid of some of your loss carryover. If you leave the stock to your heirs the stepped-up basis from the sale/resale was unnecessary since they'd get a stepped-up basis on inheritance. If you sell the stock somewhere down the road, the loss carryover would be there to keep you from paying tax.

Phil
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement