Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 6
Not quite.

Let's say I sold my rent house and (after depreciation) there is $40,000 in long term capital gains. So, now in the same calendar year (2020), I sell shares of stock at a loss -- long term capital losses. And let's say that loss is $50,000. So... in the current tax year (that both items were sold) the long term capital losses (from the sale of stock) wipe out the long term capital gains (from the sale of the rent house). So, no capital gains tax is due, right? OK. So, now there is $10,000 left over in long term capital losses, which I can carry oven into the following years at $3000 per year, until it runs out.

You get to use $3000 this year, leaving you $7000 to carry forward.

OK, so now it is the following tax year (2021).... And I sell more shares of stock at a loss (long term capital losses) and that loss is $20,000. And I have no other long term capital gains in 2021. Can I then use more than the $3000 per year that is being carried over, against my income?

You have $27000 of LTCL, of which you can use $3000 in 2021, leaving $24000 to carry forward. Once you net all of your capital gains and losses, you can only use an additional $3000 of capital loss against current year income.

I have losing stock sitting in my etrade account. I am trying to figure out if it is any benefit to me to sell it a little at a time over 2 or 3 years or just sell it all at once and then carry forward the losses in several years. (at $3000 per year) --OR-- I guess I am wondering if there is any circumstance whereby the $3000 carryover can become more in a particular year? Besides the first year when there are long term capital gains to offset a larger amount than $3000. Thanks again for all your help.

Forget about the tax consequences. Decide whether there is a good investment reason to continue to hold the losing stocks (do you think the company will rebound from a business setback, etc.) and then act accordingly. If you have $20000 in unrealized losses now, there is nothing to prevent them from increasing if you continue to hold the stock.

Ira
Print the post  

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.
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.
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.