Knowing how to handle capital gains and losses can save taxes
If you’ve lost money in the stock market this year, consider this: You may have other assets that have appreciated in value that could be sold before year-end, thereby offsetting gains with pre-existing losses.
Long-term capital losses are used to offset long-term capital gains before they are used to offset short-term capital gains. In the same vein, short-term capital losses must be used to offset short-term capital gains before they are used to offset long-term capital gains. As a taxpayer, you may use up to $3,000 of total capital losses in excess of total capital gains as a deduction against ordinary income in computing adjusted gross income.
If you want to make the most of your losses, there are numerous factors to consider. An experienced ShindelRock professional can help you navigate through these decisions, plan accordingly, and even save you money on your taxes.