Stock Markets Exposed
Lost money in Stock Market?
I lost quite a few money in the Stock Market this year. How will this loss affect my income tax in the coming year? I lost $8464 this year.
Public Comments
- Well, you can offset your loses to your income.
- I assume you're an American, correct? *** Net capital losses are deductible against your income up to a limit of $3k per year. Any excess carries forward to future years. There is no limit on the number of years you can carry them forward. [net = capital losses minus capital gains]
- Unless you sold the stock that had the loss, it won't affect your tax return. If you sold stock, you'll show all of the sales on a schedule D. You'll net the losses and gains, and if you have a net loss, can take up to $3000 of it against other income for the year. Any amounts over $3000 can be carried over to future years, and $3000 per year taken against other income that year.
- Minor note--since this always leads to confusion. Let's say you have a $10,000 loss this year and no other gains. You'd get to take a $3,000 loss against other income and carryforward the $7,000. If you had no future gains, you would use the loss at $3000 a year until you could use it up. On the other hand, if you had a gain of $5000 in 2008, you would use up the entire loss in 2008. $5000 for the gain and $2000 against other income. Or, the other extreme, if you had no other income in 2008, when you do the capital loss carryforward to 2009, you would still have a loss of $7000 since you didn't use any of it.
