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Zecco.com » General Investing » Tax Matters » Understanding capital loss question...
Last post 03-30-2008, 11:15 PM by cmcbride. 3 replies.
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  •  03-26-2008, 9:32 AM 25742

    Understanding capital loss question.

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    I've just started with stocks this year so I won't have to put this plan in action until 2009, but I wanted to see if I am understanding things correctly.  This will only be pertaining to short term stock (less than 1 year). 

    If I purchase $5000 worth of stock and I sell it (short term) for $10000, I would report a gain of $5000. 

    A week later I invest all $10000 and this time I sell it (short term) for $1000, taking a massive loss.  I would report a deduction of $9000.

    Since I had a gain of $5000 and a deduction of $9000 the deduction will cancel out the gains and I would not pay any tax on my stock trading. 

    Also, I have an additional $4000 from the loss that is not factored in.  I can write off $3000 of that against my regular income and carry $1000 over to the next year.

    Does all of that sound accurate?  Thanks!

     

  •  03-26-2008, 10:20 AM 25746 in reply to 25742

    Re: Understanding capital loss question.

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    That is correct to my knowledge.

  •  03-26-2008, 10:26 AM 25748 in reply to 25746

    Re: Understanding capital loss question.

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    I am not sure if you can carry over capital loss on a stock.

  •  03-30-2008, 11:15 PM 26043 in reply to 25746

    Re: Understanding capital loss question.

    Reply Quote
    Thanks for that info fellas.  I thought of one other question.  I do my taxes every year with turbotax online.  Will I be required to list every short term stock out individually or can you lump them all together? 

    For example if I bought and sold 100 different symbol stocks can you group them all up and say you spent $1000 and made $2000, and pay your tax on $1000.  Or do you have to list out all 100 different ones.  Same tax either way, just one way takes longer.
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