Capital Loss Carry-over Question


M

M. B.

I would like to make sure that for Tax Year 2005 nothing has
changed for the following "hypothetical" stock capital gains
situation.

I have $65,000 of short-term capital LOSS "carry-over" left
from my previous years. This year, I will have $25,000
short-term capital GAIN. This means that for the Year 2006,
I will have $37,000 left for carry-over ($65K - $25 = $40K -
$3K (standard deduction) = $37K). Am I right?

Also, I received a check in the amount of $143 as part of a
shareholder suit settlement against one of the companies in
which I held stock. Where on my Federal Returns would I
report this? I am self-employed, so I don't know if this
goes as "Misc Income" on my Schedule C.

I appreciate your help with these matters.

- Michael
 
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B

Bill

(e-mail address removed) (M.=A0B.) posted:
I would like to make sure that for Tax Year
2005 nothing has changed for the following
"hypothetical" stock capital gains situation.
I have $65,000 of short-term capital LOSS
"carry-over" left from my previous years. This
year, I will have $25,000 short-term capital
GAIN. This means that for the Year 2006, I will
have $37,000 left for carry-over ($65K - $25 =3D
$40K - $3K (standard deduction) =3D $37K). Am
I right?
Yes, in a way. You are permitted to deduct up to $3,000 of
capital loss carry-over against ordinary income, each year
-- but it's technically not called a "standard deduction."
You do this on your Schedule D, where short- and long-term
gains are combined at the top of page 2 -- which will
eliminate your $25,000 gain for 2005 -- and then you enter
the $3,000 loss carryover, and do the worksheet for the
remaining $37K.
Also, I received a check in the amount of $143
as part of a shareholder suit settlement
against one of the companies in which I held
stock. Where on my Federal Returns would I
report this? =A0 I am self-employed, so I don't
know if this goes as "Misc Income" on my
Schedule C.
If your self-employment is as a stock-trader, then Schedule
C might be appropriate ... but if this was a personal
investment, you can enter it as "Misc Income" on line 22 of
Form 1040.

Bill
 
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M

mmm

M. B. said:
I would like to make sure that for Tax Year 2005 nothing has
changed for the following "hypothetical" stock capital gains
situation.

I have $65,000 of short-term capital LOSS "carry-over" left
from my previous years. This year, I will have $25,000
short-term capital GAIN. This means that for the Year 2006,
I will have $37,000 left for carry-over ($65K - $25 = $40K -
$3K (standard deduction) = $37K). Am I right?
Yes

Also, I received a check in the amount of $143 as part of a
shareholder suit settlement against one of the companies in
which I held stock. Where on my Federal Returns would I
report this? I am self-employed, so I don't know if this
goes as "Misc Income" on my Schedule C.
depends on the nature of the payment and what transactions
have already transpired. for example, was this amount
received as part of a settlement where the stock became
worthless (think Global Crossing), if yes, then you've
already taken a capital loss for the amount and the amount
received would be treated as capital gain (i.e., less of a
loss was actually realized).
 
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N

Nan, EA in LA

Your carryover figures are correct. The $143 probably goes
on line 22 (?), the miscellaneous income line on page 1.

Nan, EA in LA
 
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A

A.G. Kalman

M. B. said:
I would like to make sure that for Tax Year 2005 nothing has
changed for the following "hypothetical" stock capital gains
situation.

I have $65,000 of short-term capital LOSS "carry-over" left
from my previous years. This year, I will have $25,000
short-term capital GAIN. This means that for the Year 2006,
I will have $37,000 left for carry-over ($65K - $25 = $40K -
$3K (standard deduction) = $37K). Am I right?
Yes.

Also, I received a check in the amount of $143 as part of a
shareholder suit settlement against one of the companies in
which I held stock. Where on my Federal Returns would I
report this? I am self-employed, so I don't know if this
goes as "Misc Income" on my Schedule C.
If you sold your stock and realized a gain or loss, I would
treat the payment as a capital gain (long or short depending
upon your holding period).
 
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M

Missy

It doesn't go on your Secheule C unless you make your living
as a self employed Stock broker. It goes on Schedule D and
probably has a basis of -0-. then flows to line 13 of Form
1040.

Missy Doyle
 
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M

M. B.

Thanks everyone for your replies!

To futher address the $143 check issue:
Also, I received a check in the amount of $143 as part of a
shareholder suit settlement against one of the companies in
which I held stock. Where on my Federal Returns would I
report this? I am self-employed, so I don't know if this
goes as "Misc Income" on my Schedule C.
#1 - my profession is Entertainer, so I am not a
professional stock trader.
#2 - the security is now worthless (has been for 2+ years)
#3 - What would I put down as the dates of purchase / sale
for this secturity, which I no longer own since 2002.

Wouldn't it now go down as LONG TERM capital gain if I put
in the day of purchase in 2002 and day of sale as the day
my check was made out (October 2, 2005)?

Thanks again everyone!
 
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N

Nan, EA in LA

Have you written off the loss on the stock previously? If
not, wouldn't you go back to the original cost of the stock
and date of purchase as the basis, and the $143 as the
"sale" in 2005? If you have already taken the loss on the
stock, you could call the $143 a belated payment, cost zero,
date back whenever the stock was bought, and sale in 2005.
And yes - long term.

Nan, EA in LA
 
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