Message Font: Serif | Sans-Serif
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev | Next
Author: lorenzo2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 123155  
Subject: Re: Capital Loss: What can I do with it? Date: 10/20/2003 8:20 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
Well, the best way to get rid of capital losses is to put them against ordinary income, $3000 at a time. You're set for the next 50 years.

After I realized a big loss, let's say in one future year, I realize a big gain, can I apply the carried-over loss to the gain?

Oh, absolutely. In fact, you have to do it that way. If you have a carried-forward loss, it is first used to offset any capital gains that you may have. If you still have a loss, up to $3K of the remaining loss goes against ordinary income, with the rest carried forward again.

When I said that the best way to use up losses was to put them against ordinary income, $3K per year until you run out, I meant that you get the greatest tax benefit that way - since ordinary income (and short term gains) is taxed at the highest rate. You don't get so much bang for the buck if you offset long term gains, since they are taxed at a fairly low rate these days. (But they're still good things to have!)

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev | Next


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:
Berkshire Hathaway

Questioning Amazon's Financials
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 Glassdoor #1 Company to Work For 2015! 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.