tax question about a capital loss

[tar heel]

It looks like we're getting from instead of giving to the IRS this year so I'm going to get my tax stuff to the accountant early for once. I used to do them and do 90% of the work now, but feel more comfortable having a CPA take over b/c I have a little business and a home office. I always know about what the bottom line will be when I take the stuff in, though.

My question is how a capital loss without a capital gain to offset it is treated. I think it is carried forward and used next year (or whenever) to offset a capital gain. Is that correct or does it improve our tax bill this year? Also, has there been a capital gains reduction or was that just dividends? If there has been a cap gains reduction, was it retroactive to the beginning of the year?

TIA

 

[Margie J]

If you have a capital loss you can take it this year. You don't need to show any capital gain in addition.

However, there is a max to the amount of capital loss you can claim per year but you can carry over the loss into the following tax year(s). For example, if you have a $6000 loss and the max you can claim is $3000 you take $3000 this year and $3000 next year.

 

[tar heel]

Thanks Margie J. Is the max based on total income or something else? It's not a huge loss (between $5,000 and $6,000) but will nicely increase the amount of our refund.

I love getting a tax refund, but I don't like the reason -- my main freelance client (75% of my business income) was bleeding red ink and had to make cuts, including me. I worked for them for 15 years!