What IRS form do you use/How do you file to deduct stock losses?

Question

If overall your stocks lost money in a year (these are short term trades, closed and realized all in 2006), how do you get the fullest tax deduction from the IRS?

Answer 1

You use Schedule D. It is the same form for reporting gain. You can deduct as much loses as you have against your gains for the year. BUT!! You can deduct only $3000, if you are married, against your earned income. It has been the same amount for over 50 years that I know of. That was back when $3000 was equivelent to $30,000 today. You can carry forward your losses for 2 addional years, no more.

You get the fullest tax deduction by selling all the loosers to offset as many gains as you can before year end. If you have too many realized loosers at year end then you can be in serious trouble. As were those dot com speculators in 2000.

Answer 2

Schedule D of the IRS

Answer 3

sch d and list the stock pur cost less sell price include commission in and out as an expense. you can carryfwd and unused losses