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Must I take $3,000 of capital losses?

 
 
ted
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      10-26-2009, 02:13 PM
I understand I can take $3,000 worth of carried forward capital losses
against ordinary income, but do I have to?

TaxCut just does it without asking, so I presume it is required, but TaxCut
could be wrong. Thanks.

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Arthur Kamlet
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      10-26-2009, 02:42 PM
In article <hc4a54$ku2$(E-Mail Removed)-september.org>,
ted <(E-Mail Removed)> wrote:
>I understand I can take $3,000 worth of carried forward capital losses
>against ordinary income, but do I have to?
>
>TaxCut just does it without asking, so I presume it is required, but TaxCut
>could be wrong. Thanks.



TaxCut seems to be right.


If you have a capital loss carryover, you must fill out the capital
loss carryover worksheet and carry over the calculated amount to your
schedule D, where it will reduce your capital gains/loss up to a
maximum of 3000. But if your income is very low, even though it might
appear to reduce your carryover and use up some of your carryover loss,
it might not. That's where the worksheet comes in.
--

ArtKamlet at a o l dot c o m Columbus OH K2PZH

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HLunsford
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      10-26-2009, 07:14 PM
ted wrote:
> I understand I can take $3,000 worth of carried forward capital losses
> against ordinary income, but do I have to?
>
> TaxCut just does it without asking, so I presume it is required, but TaxCut
> could be wrong. Thanks.
>

Curious, but just why would you not want take a deduction of $3,000
against other income? It would lower your tax, you know.

ChEAr$,
Harlan Lunsford, EA n LA

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D. Stussy
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      10-26-2009, 08:03 PM
"ted" <(E-Mail Removed)> wrote in message
news:hc4a54$ku2$(E-Mail Removed)-september.org...
> I understand I can take $3,000 worth of carried forward capital losses
> against ordinary income, but do I have to?
>
> TaxCut just does it without asking, so I presume it is required, but

TaxCut
> could be wrong. Thanks.


You do not have any discretion under the law not to take them. There is no
election here.

Just as there's no election that allows you to ignore income (unless
specifically exempted by statute).

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ted
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      10-26-2009, 10:09 PM

"HLunsford" <(E-Mail Removed)> wrote in message
news:hc4sdm$tv1$(E-Mail Removed)-september.org...
> ted wrote:
>> I understand I can take $3,000 worth of carried forward capital losses
>> against ordinary income, but do I have to?
>>
>> TaxCut just does it without asking, so I presume it is required, but
>> TaxCut could be wrong. Thanks.

> Curious, but just why would you not want take a deduction of $3,000
> against other income? It would lower your tax, you know.
>

I have way more deductions already to lower my income to zero; this is
completely wasted. It would be nice to save it for a year in which I could
use it. Should there ever be such a year...

--
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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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removeps-groups@yahoo.com
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      10-26-2009, 11:32 PM
On Oct 26, 3:09*pm, "ted" <(E-Mail Removed)> wrote:
> "HLunsford" <(E-Mail Removed)> wrote in message
>
> >> I understand I can take $3,000 worth of carried forward capital losses
> >> against ordinary income, but do I have to?

>
> >> TaxCut just does it without asking, so I presume it is required, but
> >> TaxCut could be wrong. *Thanks.

> > Curious, but just why would you not want take a deduction of $3,000
> > against other income? *It would lower your tax, you know.

>
> I have way more deductions already to lower my income to zero; this is
> completely wasted. *It would be nice to save it for a year in which I could
> use it. *Should there ever be such a year...


Follow the capital loss carryover worksheet mentioned by Art.

An example:

Suppose on last year's return you had a net long term loss of 5k. And
suppose for last year your AGI was 20k, and your itemized deductions
were 27k.

http://www.completetax.com/taxguide/...ds/caploss.pdf

line1=-7000 (income after itemized deduction, but before exemption)
line3=line1-line2=-7000
line4=3000 (loss as a positive number)
line5=line3+line4=-4000
line6=-4000 (smaller of line4, line5)
line11=5000 (long term loss as a positive number)
line12=0 (short term gain)
line13=0 (line6-line7, but not less than zero)
line14=line12+line13=0
line15=line11-line14=5000

Your capital loss carryover is the full 5k, not 2k.

Now suppose your AGI is 26k.

line1=-1000 (income after itemized deduction, but before exemption)
line3=line1-line2=-1000
line4=3000 (loss as a positive number)
line5=line3+line4=+2000
line6=+2000 (smaller of line4, line5)
line11=5000 (long term loss as a positive number)
line12=0 (short term gain)
line13=2000 (line6-line7, but not less than zero)
line14=line12+line13=2000
line15=line11-line14=3000

The capital loss carryover is 3k, as if only 2k were used up in the
previous year.

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<< that may be imposed upon the taxpayer. >>
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D. Stussy
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      10-27-2009, 01:58 PM
"ted" <(E-Mail Removed)> wrote in message
news:hc552i$msl$(E-Mail Removed)-september.org...
> "HLunsford" <(E-Mail Removed)> wrote in message
> news:hc4sdm$tv1$(E-Mail Removed)-september.org...
> > ted wrote:
> >> I understand I can take $3,000 worth of carried forward capital losses
> >> against ordinary income, but do I have to?
> >>
> >> TaxCut just does it without asking, so I presume it is required, but
> >> TaxCut could be wrong. Thanks.

> > Curious, but just why would you not want take a deduction of $3,000
> > against other income? It would lower your tax, you know.
> >

> I have way more deductions already to lower my income to zero; this is
> completely wasted. It would be nice to save it for a year in which I

could
> use it. Should there ever be such a year...


You don't lose it. Look at the carryforward worksheet.

You should also check if you have a net operating loss.

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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
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ted
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      10-27-2009, 02:28 PM

"D. Stussy" <(E-Mail Removed)> wrote in message
news:hc61h5$pm1$(E-Mail Removed)...
> "ted" <(E-Mail Removed)> wrote in message
> news:hc552i$msl$(E-Mail Removed)-september.org...
>> "HLunsford" <(E-Mail Removed)> wrote in message
>> news:hc4sdm$tv1$(E-Mail Removed)-september.org...
>> > ted wrote:
>> >> I understand I can take $3,000 worth of carried forward capital losses
>> >> against ordinary income, but do I have to?
>> >>
>> >> TaxCut just does it without asking, so I presume it is required, but
>> >> TaxCut could be wrong. Thanks.
>> > Curious, but just why would you not want take a deduction of $3,000
>> > against other income? It would lower your tax, you know.
>> >

>> I have way more deductions already to lower my income to zero; this is
>> completely wasted. It would be nice to save it for a year in which I

> could
>> use it. Should there ever be such a year...

>
> You don't lose it. Look at the carryforward worksheet.
>

You're right! With a negative income it doesn't subtract the $3,000. I
feel $600 richer.

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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
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HLunsford
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      10-27-2009, 06:22 PM
ted wrote:
>>

> You're right! With a negative income it doesn't subtract the $3,000. I
> feel $600 richer.
>

You see now? The government will take care of you.

ChEAr$,
Harlan Lunsford, EA n LA

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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