Comments on: Deducting Capital Losses of Stock

By: Scott

Scott — Sat, 02 May 2009 19:33:34 +0000

I have recently been laid off, and was wondering I have a small amount in that companies 401k, and last year I posted a loss of 3k on Long Term Stock. Can I, this year, cash out my 401k and use that 3000.00 loss from last year to suppliment any taxes? just to give you a figure 5k in 401k. If it is possible how much can I expect to get back?

By: Jim

Jim — Wed, 15 Apr 2009 01:37:50 +0000

You will likely have to amend previous years, I would talk to an experience tax accountant to have that done properly.

By: Suzanne

Suzanne — Tue, 14 Apr 2009 23:19:18 +0000

I’m afraid I didn’t write-off my stock losses the right way from several years ago. I’ve just been writing off a few at time each year. I still have several thousands in losses that occurred from 98-01. Is there a way to still write them off? Can I go ahead and include them all now even though they were bought and sold several years ago? Or, do I need to go back and amend the past years?

By: Jim

Jim — Sat, 11 Apr 2009 13:31:23 +0000

I believe it would be $8,000, reducing it by the entire $32,000 loss from last year. Check with a tax accountant to be certain.

By: Sunny

Sunny — Sat, 11 Apr 2009 12:46:25 +0000

I lost 35K last year. I deducted 3K and carried forward 32K. This year I made profits of 40K. So, this year my taxable capital gain would be 37K (by just reducing 3K) or 8K (reducing by entire 32K brought forward)?

By: ccreigo

ccreigo — Sat, 14 Mar 2009 17:54:54 +0000

So what if all I have is a short term capital loss?

By: Jeff Rose

Jeff Rose — Tue, 10 Mar 2009 19:19:24 +0000

@ James

Unfortunately, you still have to wait. Many people used to do this arguing that the “IRA” was a separate entity. Then IRS issued Rev. Rul. 2008-5 that states you cannot do this. Some people still try since techincally the IRS won’t have a record of the purchase (until you get audited). Proceed at your own risk, but remember that big brother is always watching.

By: James

James — Tue, 10 Mar 2009 16:10:32 +0000

I haven’t funded my Roth yet this year, and I was just thinking that if I sold some of my quality stock that is down like everything else, and then moved the money to my Roth, wouldn’t that mean I’d get the loss plus when the stock goes back up I wouldn’t have gains (since Roth is post tax)? Would I still have to wait the 31 days to buy the stock back?

By: Jim

Jim — Wed, 04 Mar 2009 19:54:47 +0000

I’m afraid you can’t.

By: lonnie

lonnie — Wed, 04 Mar 2009 17:57:19 +0000

Can I put ny losses from my 401k on my taxes.

By: Fern

Fern — Wed, 22 Oct 2008 16:37:40 +0000

Is it possible to take a capital gain loss of $3,000 and also deduct interest from my margin account? I understand the limit of the insterest deduction is the short term capital gains so I’m wondering if I can do both. I have enough long term capital losses this year to end up with a net loss (Long term losess minus short term gains) of $3,000. can I still deduct the interests?

By: Travis

Travis — Sun, 09 Dec 2007 05:52:20 +0000

Here’s a tip my millionaire mentor showed me. If you have a good stock you want to keep but has been doing bad this year you: sell your losing stock, take the tax deduction and immediately buy an index fund in the same industry as the stock then wait 31 days and then sell your index fund and buy back the stock. He’s been doing this for years on stocks he trades covered calls on.

By: jim

jim — Fri, 07 Dec 2007 20:58:53 +0000

Sorry for not being clearer, short term capital gains are passed along and treated as short term capital gains in the next year as well. This is important because long term capital losses will offset long term capital gains first, then short term capital gains.

The answer to your second question is yes, they offset gains in the year they are sold.

By: NewGirl

NewGirl — Fri, 07 Dec 2007 16:38:26 +0000

You say that “A long term capital loss that is carried to the next year will be treated as a long term capital loss….” What happens to short term capital losses? Can they be used to offset capital gains in the year they are sold? Can they be carried over to the next year? I haven’t been able to find this information on the IRS site. Does anyone know?