I will have short term capital gains this year from stocks I've bought and sold. I have some stocks I've held long term and could sell for a loss. I have no long term capital gains for this year. I know that federal short term capital gains are taxed as income at about 28% and long term taxed at about 18%.
1) Will selling these long term stock at a loss help to lower the my federal taxation on my short term capital gains?
2) Will each dollar of long term losses reduce my federal short term gains to be taxed by dollar for dollar?
2007-09-07 14:33:46 · 4 answers · asked by trader 4 in Business & Finance ➔ Taxes ➔ United States
You can use losses to offset gains, no matter which way the losses and gains are. Long term losses can offset short term gains, short term losses can offset long term gains, long term losses can offset long term gains, short term losses can offset short term gains, etc.
Net short term gains are taxed at whatever your tax rate is.
Net long term gains are taxed at maximum rate of 15% (5% for those in 10% or 15% tax brackets).
If losses exceed gains you can deduct up to $3,000 in losses per year against other income ($1,500 per year if married filing separately). Any excess would be carried forward to be used in future year at $3,000 per year.
2007-09-07 21:21:56 · answer #1 · answered by Anonymous · 8⤊ 0⤋
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2016-12-24 22:42:31 · answer #2 · answered by ? 3 · 0⤊ 0⤋
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RE:
Does a long term capital loss help offset short term capital gains for reducing taxes?
I will have short term capital gains this year from stocks I've bought and sold. I have some stocks I've held long term and could sell for a loss. I have no long term capital gains for this year. I know that federal short term capital gains are taxed as income at about 28% and long term...
2015-08-19 04:03:54 · answer #3 · answered by Leontine 1 · 0⤊ 0⤋
Yes and yes to your two questions. Look at schedule D - you can download it at irs.gov - short and long term losses are netted before taxes are calculated.
Actually, the maximum rate for long term capital gains is 15%. Short term are taxed as ordinary income, so that depends on your tax bracket - if you are in a 28% tax bracket, then yes they'd be taxed at 28%.
2007-09-07 14:47:21 · answer #4 · answered by Judy 7 · 3⤊ 0⤋
My question is similar, but differs in that I want to see if I can counter the long term gains -- or the distributions I've taken -- in my traditional IRAs and/or 457b deferred compensation accounts with the carryover losses from stock sales?
(At this point, I have not taken distributions from any IRA, but have taken funds from my 457b deferred compensation plan.) But, I has not yet inquired if I could offset the distributions. It is NOT suggested in my Turbo Tax that I might do this. I DO take the $3000.00 against ordinary income, however.
2015-02-04 14:34:35 · answer #5 · answered by PWOC Guy 1 · 0⤊ 0⤋
Yes, your long-term capital losses will offset your short-term capital gains...dollar for dollar.
However, if your losses exceed your gains, you will be limited to a $3,000 net loss.
2007-09-08 00:14:23 · answer #6 · answered by Anonymous · 2⤊ 2⤋