yall Posted January 31, 2009 Share Posted January 31, 2009 So this is the first year my portfolio took a net loss. My question is, will my losses negate any gains or dividends that would be normally listed as income? I may have an answer in the mail today if my 1099 comes, but figured I'd see what the good folks of TBD thought. Link to comment Share on other sites More sharing options...
dpbillsfan Posted January 31, 2009 Share Posted January 31, 2009 Pretty sure only if you sold any holding's at a loss do you get to deduct. Link to comment Share on other sites More sharing options...
eSJayDee Posted January 31, 2009 Share Posted January 31, 2009 It depends on many factors. What type of investment the loss was in, whether the loss was realized or unrealized. Basically, I believe you can claim a loss of up to $3000 to offset ordinary income. Beyond that, you either need to carry the loss fwd or file amended tax returns for previous yrs offsetting those gains w/ this yrs losses. Link to comment Share on other sites More sharing options...
JimBob2232 Posted January 31, 2009 Share Posted January 31, 2009 Agreed. I am not sure about the $3,000 cap, but since this is a passive loss I am sure there is a cap...$3000 seems too low to me, but I am not sure. That said, you actually have to realize the loss to deduct it from your taxes. This means you have to have sold the security prior to 1-Jan-09. In addition, there are what is called wash-sale rules. This means you cannot sell a stock on Dec 31st and re-buy it on Jan 1st and claim the loss. You have to be out of the security for 30 days. (You also cannot buy a similar security, although the rules on that are a little fuzzy. Sell Coke and buy Pepsi, and you are okay...so more thank likely this is not an issue unless you rebought the stock within 30 days or are trying to commit fraud). Just to reitreate, if you bought a stock for $50/share and it is now worth $10/share and YOU STILL OWN THOSE SHARES you cannot claim ANY loss. if you bought a stock for $50 and sold it for $10/share sometime during CY08, you can take a $40/share loss on it to offset your active income, subject to any cap. Hope this helps! Link to comment Share on other sites More sharing options...
yall Posted January 31, 2009 Author Share Posted January 31, 2009 I appreciate the responses gang! Link to comment Share on other sites More sharing options...
Fezmid Posted January 31, 2009 Share Posted January 31, 2009 Agreed. I am not sure about the $3,000 cap, but since this is a passive loss I am sure there is a cap...$3000 seems too low to me, but I am not sure. That said, you actually have to realize the loss to deduct it from your taxes. This means you have to have sold the security prior to 1-Jan-09. In addition, there are what is called wash-sale rules. This means you cannot sell a stock on Dec 31st and re-buy it on Jan 1st and claim the loss. You have to be out of the security for 30 days. (You also cannot buy a similar security, although the rules on that are a little fuzzy. Sell Coke and buy Pepsi, and you are okay...so more thank likely this is not an issue unless you rebought the stock within 30 days or are trying to commit fraud). Just to reitreate, if you bought a stock for $50/share and it is now worth $10/share and YOU STILL OWN THOSE SHARES you cannot claim ANY loss. if you bought a stock for $50 and sold it for $10/share sometime during CY08, you can take a $40/share loss on it to offset your active income, subject to any cap. Hope this helps! Link to comment Share on other sites More sharing options...
/dev/null Posted January 31, 2009 Share Posted January 31, 2009 If you live in California and are due a state refund, don't hold your breath http://www.msnbc.msn.com/id/28448852/ Link to comment Share on other sites More sharing options...
Lurker Posted January 31, 2009 Share Posted January 31, 2009 It depends on many factors. What type of investment the loss was in, whether the loss was realized or unrealized.Basically, I believe you can claim a loss of up to $3000 to offset ordinary income. Beyond that, you either need to carry the loss fwd or file amended tax returns for previous yrs offsetting those gains w/ this yrs losses. Agreed. Link to comment Share on other sites More sharing options...
KD in CA Posted January 31, 2009 Share Posted January 31, 2009 Generally you can deduct ST losses against ST gains and LT loses against LT gains. But you'll want to read the rules carefully when you're going through your return as there are a lot of factors. Link to comment Share on other sites More sharing options...
Stussy109 Posted February 1, 2009 Share Posted February 1, 2009 Agreed. I am not sure about the $3,000 cap, but since this is a passive loss I am sure there is a cap...$3000 seems too low to me, but I am not sure. That said, you actually have to realize the loss to deduct it from your taxes. This means you have to have sold the security prior to 1-Jan-09. In addition, there are what is called wash-sale rules. This means you cannot sell a stock on Dec 31st and re-buy it on Jan 1st and claim the loss. You have to be out of the security for 30 days. (You also cannot buy a similar security, although the rules on that are a little fuzzy. Sell Coke and buy Pepsi, and you are okay...so more thank likely this is not an issue unless you rebought the stock within 30 days or are trying to commit fraud). Just to reitreate, if you bought a stock for $50/share and it is now worth $10/share and YOU STILL OWN THOSE SHARES you cannot claim ANY loss. if you bought a stock for $50 and sold it for $10/share sometime during CY08, you can take a $40/share loss on it to offset your active income, subject to any cap. Hope this helps! What he said... Link to comment Share on other sites More sharing options...
Tcali Posted February 1, 2009 Share Posted February 1, 2009 So this is the first year my portfolio took a net loss. My question is, will my losses negate any gains or dividends that would be normally listed as income? I may have an answer in the mail today if my 1099 comes, but figured I'd see what the good folks of TBD thought. Market losses from a SALE of those market assets negate market(capital)gains derived from dividends or stock sales or sales of an asset. These events should occur within the same year. But remember--you can hold your losses for future use against capital gains. It isn't always the smartest move to negate gains--especially in a year where your income is low. Talk to your acct. And dont forget the $3000 deduction against ordinary income(but again dont use this if your income is very very low--which can be the case for the self employed). Link to comment Share on other sites More sharing options...
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