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Finance & Stock Groups Forum Index » Mutual Funds » taxes on a loss
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| Mike Tannebaum |
 Posted: Mon Jul 09, 2007 7:46 am |
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Unfortunately last year I used an investment adviser who lost me $9K total in my brokerage account.
She was convinced that the stock market was going to crash and had me scared enough to give her some
of my money for investing.
I guess the only upside to this I kept dollar cost averaging in my 401k and it looks like I'll have
a capital loss on my 2006 taxes (I filed an extension and am finishing up taxes now).
This is my 1st loss - Turbo Tax really is helpful in this area but I'm hopig to get confirmation from
someone else who knows. It looks like I get to claim $3,000 this year and will be able to claim as a
"capital loss" $3k for the next 2yrs on?
No way I could claim the full $9k, enjoy a nice big return at once is there?
I believe that's right - I know I could call a CPA but I thought it might be easier to get some
confirmation here.
-michael t. (back to lurking!) |
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| Mark Freeland |
| Posted: Mon Jul 09, 2007 8:17 am |
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"Mike Tannebaum" <mtan@nomail.com> wrote in message
news:4691af9b$0$30597$4c368faf@roadrunner.com...
Quote: Unfortunately last year I used an investment adviser who lost me $9K
total in my brokerage account. She was convinced that the stock market
was going to crash and had me scared enough to give her some of
my money for investing.
I guess the only upside to this I kept dollar cost averaging in my 401k
I'm not sure how this is related to your loss. (If your loss is in a 401k,
it has no tax effect and you can't take a loss - I'm assuming you're talking
about a loss in a separate, taxable brokerage account.)
Quote: and it looks like I'll have a capital loss on my 2006 taxes
(I filed an extension and am finishing up taxes now).
This is my 1st loss - Turbo Tax really is helpful in this area but I'm
hopig to get confirmation from someone else who knows. It looks like
I get to claim $3,000 this year and will be able to claim as a
"capital loss" $3k for the next 2yrs on?
Long term capital losses get applied first against long term gains (this
includes any gains distributed from your mutual funds). If you have more
losses than offsetting long term gains, the remaining losses then get
applied against any short term gains. (Mutual funds don't distribute short
term gains, but you could have short term gains from selling secuities held
for a year or less.)
Finally, if you still have more losses remaining, the first $3,000 can be
used to reduce your ordinary income. Whatever is left over is carried over
until next year, when the process repeats.
So for 2007, you may have $6,000 carried over. If in 2007 you have over $6K
in capital gains (e.g. from mutual fund distributions, from sales of
securities, etc.) then you would use all of the $6,000 to offset those long
term gains.
If you have less than $6K in (long + short term) capital gains, then you can
use whatever is left over, but only up to $3K to offset ordinary income.
Any remainder would be carried over to 2008. That would likely be less than
$3K, since you'd likely have some capital gains in 2007.
Quote: No way I could claim the full $9k, enjoy a nice big return at once is
there?
I believe that's right - I know I could call a CPA but I thought it might
be easier to get some confirmation here.
I am not a CPA (or lawyer, or CFP, or ...). I am simply stating my
understanding of how taxes work. It may or may not be correct; it is not
advice and you should not rely upon it.
Mark Freeland
BnetOnewsX@sbcglobal.net |
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