I recently sold some shares of stock granted to me when my company came out of bankruptcy. I didn't sell all my shares. I know the initial income in the Ch. 11 emergence will be reported on my W-2 as income, but the total loss in selling the shares was around $230 (I think $223.31 w/o checking the website for sure).
Is this loss reported separately from itemized or standard deductions--basically my refund amount will go up by $230 or a fraction thereof based on tax percentages--or will the reporting be buried so to speak in the Q&A on my software package I use in determining if it's better to take the standard deduction or itemize?
2007-09-04 03:51:35 · 6 answers · asked by DRL 5 in Business & Finance ➔ Taxes ➔ United States
Capital gains transactions are calculated separately, on a schedule D, and have nothing to do with whether or not you itemize - that is separate. A capital gains loss is subtracted from your other income, up to a limit of $3000 per year which you are well below.
Your refund won't go up $233. That amount is subtracted from your income before taxes are calculated, so the increase in refund will be that amount times your tax bracket. If you are in a 15% in bracket, your refund would increase by $35 - in a 25% bracket, $58. The most you could get, if you are in the top bracket of 35% which you probably aren't, would be $82.
2007-09-04 04:05:00 · answer #1 · answered by Judy 7 · 2⤊ 0⤋
The profit and loss from the sale of stocks is to be reported on Schedule D: Capital Gains and Losses. You can deduct a loss of up to $3,000 from your income in a year.
Your loss of $230 will reduce your income by this amount. Your software package will ask you about your capital gains or losses transactions. If you miss it somehow, then go to the Forms and open the form Schedule D.
2007-09-04 05:47:38 · answer #2 · answered by MukatA 6 · 1⤊ 0⤋
declaring capital gains losses has nothing to do with whether you itemize or take the standard deduction. You can declare the loss either way. you will be using schedule D, I think. You will be able to deduct the loss from your income. So your tax savings will be $230 times your tax bracket.
2007-09-04 04:00:30 · answer #3 · answered by dan 4 · 1⤊ 0⤋
Loss on a stock sale is reported on Schedule D and reduces your taxable income (before deductions), so it does not affect whether you take the standard deduction or itemize.
2007-09-04 08:16:41 · answer #4 · answered by StephenWeinstein 7 · 1⤊ 0⤋
It will be deducted from you income. This means you will be taxed as if you have $223 less income. The amount this affects your refund will depend on your max tax rate. Since it is treated as negative income, it is not included in your itemized deductions.
2007-09-04 03:59:28 · answer #5 · answered by VATreasures 6 · 1⤊ 0⤋
Yes you can show it as a capital loss (short term or long term depending on the period you held the stock). Thsi can be set off against capital gains during the year or carried forward to subsequent years. No limit on amount as long as it is actuall loss realised.
2016-05-21 01:24:47 · answer #6 · answered by brinda 3 · 0⤊ 0⤋