We have 1 income, 1 child, 1 mortgage, itemize our taxes, and are riding on a $3000 loss on stocks (that are not capital gains).
Would you take a loss or let the stocks ride in the next year? Does it make THAT MUCH of a difference?
2007-12-21 12:31:13 · 4 answers · asked by Mr. Question 1 in Business & Finance ➔ Taxes ➔ United States
Take the 3000, it can be deducted from your earned income. It will reduce your earned income. Ask your tax guy. This is on the front page of the tax form.
2007-12-21 13:03:02 · answer #1 · answered by Anonymous · 0⤊ 0⤋
You haven't lost money in the stocks until you sell them. If you believe they are not going to recuperate and the additional $3000 would benefit you for tax year 2007 then go ahead and take the loss. Remember, you have to sell the stock in order to claim the loss.
If you are okay this year, but 2008 looks like you will be making a lot more money then selling them and taking the loss in 2008 will be a good choice. However, it is never a good thing to lose so much money -- I would rather make money and pay taxes than to lose money and pay less tax!
2007-12-21 20:44:40 · answer #2 · answered by Othniel 6 · 0⤊ 0⤋
Well, if you are in a 15% tax bracket it would save you $450 in taxes. Only you can decide if it's worth it. If you figure that it will bounce back in the near to mid term it might be worth hanging onto it. But if you believe that it will tank further then cut your losses now and take the deduction.
I'm looking at about a $6,000 loss in the stocks from my previous employer based upon what I paid for them. I'll be cashing that out next week and taking a $3,000 loss over the next 2 tax years as I believe that it will take them 3 of 4 years with their restructuring to become profitable again. The upside? I'll have 5 figures to play with from the proceeds from the sale!
2007-12-21 20:40:18 · answer #3 · answered by Bostonian In MO 7 · 0⤊ 0⤋
It totally depends on the stock/s in question and their future outlook. Do they have potential to become profitable/more profitable in the future? Which stocks do you have? If they are blue chips, etc. you should probably just ride it out. The trick is to buy low and sell high, not the other way around. Some people in your situation would see this as a buying opportunity and would buy MORE of the stock/s in question. Again though, it is hard for me to advise when I don't know which stocks we are talking about.
Good luck!
2007-12-21 20:36:16 · answer #4 · answered by Anonymous · 0⤊ 0⤋