Are short term and long term capital losses treated the same ?

Question

from a tax perspective can I carry forward both short and long ? and is it $3,000 year ?

Answer 1

You net out your short and long term gains/losses for the year, and can take $3000 loss against other income in that year. If you have more that $3000 net loss, you carry the extra over to the following year. There is a worksheet in the instructions for schedule D to calculate your short-term and long-term carryover. The following year you'd show your st and lt carryover on schedule D with any capital gains and loss from that year - then if you again have a net loss is over $3000, you can carry the excess into the next year.

Note that if in any year you don't have $3000 in other income to be offset by your losses, you still have to subtract $3000 from the carryover for that year.

Answer 2

They are treated differently from a tax standpoint. Most people will pay less taxes on long-term gains than short-term gains.

If the money is in a tax-deferred account like an IRA or 401(k), it doesn't matter.

Answer 3

Technically no they aren't. But, in a practical manner yes they are.
And yes it is limited to $3000 a year.

And once you carry over a loss there is no difference between them.

The only difference between the two is in the year they are realized, a long term loss goes against long term gains first...thus lessen the capital gain advantage. Generally, that is the only difference between the two.

Answer 4

you can carryover both types of losses, and the $3000 loss is the limit you can take in one tax year over your short term and long term capital gains.