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Losses on Stock Investments

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T

tmarsh

Guest
Can losses on sale of stock investments (capital losses) be deducted against ordinary income or can it only be deducted against capital gains, with any net capital loss being carried forward to future years??
 


L

loku

Guest
You almost had it: losses on the sale of stock (capital losses) must first be deducted against capital gains. Then $3,000 of net capital loss may be deducted against ordinary income and any excess must becarried forward to future years.
 
T

tmarsh

Guest
Net Loss Carried Forward Against What?

Loku-

Thanks for the info; is the unused net capital loss carried forward against capital gains in the future or can it be used against ordinary income then?

Also, do these same rules apply for a corporation or are they different??
 
L

loku

Guest
capital loss

The loss carried forward to a year is combined with the losses of that year. If the total exceeds the gains, up to $3,000 of net capital loss can again be deducted against ordinary income.

Corporate taxpayers may not deduct any portion of excess capital losses from ordinary income, but they may carry net capital losses back three years and forward five.

 

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