Limit on reporting capital loss.?

Question

Why is there a limit on the total capital loss you can report but none on total capital income. Isn't it unfair?

Answer 1

There is no limit on the amount of capital losses that can be claimed in any one year. They are merely restricted to the amount of the gains plus $3,000. Anything else is carried forward, so you never actually lose it.

Compare this with many other countries where capital losses may only be set against capital gains and may not be set against other income. Therefore, the IRS is actually quite generous, compared to other countries.

Answer 2

The $3,000 net limitation on the amount of loss you can claim in any one tax year is to prevent tax abuse. Just think if there were no limit to the amount of losses claimed...a person may be so inclined to always report a loss and never pay taxes! So yes, the amount may be low, but it is fair. Besides, any unused loss that you report, but is not currently deductible, is carried forward to future years when you have gains.

Answer 3

Assuming you're in the united kingdom you will could desire to declare the loss on your tax return for the 300 and sixty 5 days wherein the loss exchange into made. in case you made effective factors besides for the time of the 300 and sixty 5 days the loss could be used to offset against the effective factors first.

Answer 4

Life is not fair. The only thing fair about law is that, at least in theory, everyone has to follow the same rules.

Answer 5

Never use "fair" in a sentence referencing the tax code.

Write your Senators and your Congressperson. Nothing will happen, but you can say you tried......

Answer 6

losses can be carried forward to off set future tax!