# Long & Short term capital gains / losses

M

#### My interest

If I had \$3000 short-term capital loss and \$3000 long term capital
gain, what will be my net position? (I tried to following schedule
A&D try to figure out, but got lost. :->_\$B!K_(B Thanks.

R

#### Rich Carreiro

My interest said:
If I had \$3000 short-term capital loss and \$3000 long term capital
gain, what will be my net position?
Zero.

You'll have a \$3000 loss in Part I of Sched D, a \$3000 gain
in Part II of Sched D, and they'll net to zero in Part III
of Sched D, and on Form 1040.

P

#### Phil Marti

:

If I had \$3000 short-term capital loss and \$3000 long term capital
gain, what will be my net position? (I tried to following schedule
A&D try to figure out, but got lost.
The problem is you paid too much attention to that alphabet on the wall in
kindergarten. Had you started with Schedule D you'd have seen that this is
all dealt with there, which would mean you'd never have gotten to Schedule
A, which would mean you'd never have gotten confused trying to find
something on Schedule A that isn't there.

Assuming you paid appropriate attention in arithmetic, you'll see that the
bottom line is zero.

M

#### My interest

Zero.

You'll have a \$3000 loss in Part I of Sched D, a \$3000 gain
in Part II of Sched D, and they'll net to zero in Part III
of Sched D, and on Form 1040.
So does this mean that you can benefit from favorable lower rate on
long term capital gains only if you have a net combined profit?

J

#### joetaxpayer

My said:
So does this mean that you can benefit from favorable lower rate on
long term capital gains only if you have a net combined profit?
Well, that's one way to view it, I guess. A loss of \$3K short or long
will wipe out the LT gain. If you took the loss in year 1 and gain in
year 2, you'd be ahead. The loss would go against ordinary income, and
the gain would be long term. I'd warn, however, again letting the tax
tail wag the investing dog. Delay the gain and the gain may just
evaporate. Of course this decision becomes easier as December starts to
close in.
Joe

B

#### Barry Margolin

joetaxpayer said:
Well, that's one way to view it, I guess. A loss of \$3K short or long
will wipe out the LT gain. If you took the loss in year 1 and gain in
year 2, you'd be ahead. The loss would go against ordinary income, and
the gain would be long term. I'd warn, however, again letting the tax
tail wag the investing dog. Delay the gain and the gain may just
evaporate. Of course this decision becomes easier as December starts to
close in.
Joe
Another way to view it is that if you've sold some securities at a loss,
you can take some gains this year, and you won't be taxed on them, up to
the amount of your losses. Because the losses offset any types of
gains, you can safely take short-term gains if you want.