Spreading a loss over several years

Last year I made a good profit on my stock investments. This year there is a chance I may end up with a loss. Do I understand it correctly that I must pay full tax on last year's profit at this time, but that next tax season I can begin to spread this year's loss over several years? I would love to spread it retroactively to last year, if that's possible. TIA Paul

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Reply to
Paul B.
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If you are asking about a net capital loss, the maximum amount allowed for the year is $3000. Any excess gets carried in only one direction--------> forward.

-- Alan

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Reply to
A.G. Kalman

You report the gain or loss *only* when you sell the stock. If you sold the stock at a profit (basis + fees - sales price) you pay tax on the profit. If you have a loss you may deduct up to $3000 per year until it is all deducted. If you did not sell any stock, you do not report any. Missy Doyle

Reply to
mytax

[snip]

It's not.

-- Rich Carreiro snipped-for-privacy@animato.arlington.ma.us

Reply to
Rich Carreiro

It is applied against future gains of the same category (short, long) and in $3000 annual offsets to other income. It goes until it runs out, you die, or Congress changes the law.

Reply to
rick++

What idiot told you this? Of course you can't.

It's not.

-- David M. Woods, EA, ChFC, CLU Woods Financial Services Norwood, MA 02062

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Reply to
David Woods, EA, ChFC, CLU

Capital losses can only be carried forward. In the future years, they can be offset against capital gains plus a max of 1500 if single/3000 if joint. This means if you have no capital gain in 2005 and you are single, you get to use 1500 to reduce income. If there is still an unused loss, it continues to be carried forward. Mike Lewis, CPA

Reply to
Mike Lewis

To the original poster: the above answer is correct, but may be confusing to someone not familar with the loss limitation rules. What the above answer is shorthand for is: If you have a *net capital loss* for the year, INCLUDING ANY CARRIED IN LOSS from a previous year, then you can only deduct $3000 of the loss that year, with the remainder carrying forward to next year. In other words, there is no limit to how much loss (carried in from previous years and/or realized in the current year) can be deducted against gains realized in the current year.

-- Rich Carreiro snipped-for-privacy@animato.arlington.ma.us

Reply to
Rich Carreiro

That's $1500 if MFS, and $3000 otherwise....

Reply to
Arthur L. Rubin

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