Capital loss on mutual fund sales


Z

zxcvbob

I'm doing DD's federal taxes; she is a college student and had very
little income last year. In round numbers, $250 in wages, $2000 from US
Savings Bonds, and $100 in bank interest. She also had a $4500 loss on
a mutual fund sale. Do we have to write off $3000 this year and only
carry [$1500] forward to next year? (I guess that's better than having
to write off the whole $4500 this year)

Or can she take $2000 of the loss this year (the amount that drives her
tax liability to zero) and carry over [$2500]?

Thanks,
Bob
 
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A

Arthur Kamlet

I'm doing DD's federal taxes; she is a college student and had very
little income last year. In round numbers, $250 in wages, $2000 from US
Savings Bonds, and $100 in bank interest. She also had a $4500 loss on
a mutual fund sale. Do we have to write off $3000 this year and only
carry [$1500] forward to next year? (I guess that's better than having
to write off the whole $4500 this year)

Or can she take $2000 of the loss this year (the amount that drives her
tax liability to zero) and carry over [$2500]?

She has to fill out schedule D which will transfer -$3,000 to
Form 1040 Line 13, and wipe out any possible income tax.

Now she should also fill out the Capital Loss Carryover Worksheet
to see how much of the 3000 was actually used up. It could and will
be less than 3000. So she carries over more than 1500 of loss to
next year.
 

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