Thanks for the informative video. I have a question on scenario 2 (video time around 4:15), where the Hilda's gain for 2022 is $789 and her carry over loss from 2021 is $1,585. You mentioned the total is reduced to zero and the remaining loss is carried over to 2023. As IRS allows up to $3,000 of capital loss to be deducted every year, couldn't Hilda use that balance ($796) from her 2022 income?
Just came across your channel. If in 2022 I had a $20k capital loss in stock market and a $3k capital gain in the stock market in that same year, for a total net loss of -$17k, would I be able to offset that $17k loss carryover into next year against a $25k capital gain in 2023 in stock market, for a total net of $8k to be taxed on?
@@TheTaxGeek So the $3k limit is only on other personal income and not to the same class of income (stock market)? If I have a capital loss, do I have to use part of that loss up to $3k against other income or can I save it only for the same class (stock market)? In my opinion, using $3k loss against a $3k gain is better, whereas you don’t pay any tax on it; whereas, against other income you’re saving an amount equivalent to your effective tax rate which will be less than the entire $3k.
Great question - would love to get an answer - If we could save our $3k Cap Loss Carry Over and use it at our discretion that would be awesome ! Hope we can
Lets say I have 12k in taxable income form my w4 and have 8k in capital losses. Is my taxable income now 4k? Or do capital losses only off set capital gains?? Since I have no gains thank you :)
If you have net capital losses of $8K, you can use $3K of those losses to offset other income. Any remaining losses can be carried forward and used to offset future capital gains, or offset other income, $3k/year, until the capital loss is used up.
Question, what if my losses for 2022 -$9000 and i made Capital Gain in 2023 +$10000 What version will be correct? a. $10000-$9000 (losses from 2022) = $1000 Taxable income b. $10000-$3000 (maximum deduct) = Taxable $7000 and $6000 losses will carry over to 2024? chatGPT says i should be able to combine my carry losses with gain without any limitations...
It seems like A is the correct calculations. Also Investopedia got an example: "Realized Losses and Recognized Gains Another category is recognized gains. Although all capital gains realized in a given year must be reported for that year, there are some limits on the amount of capital losses that may be declared in a given year in some cases. Again, while any loss can ultimately be netted against any capital gain realized in the same tax year, only $3,000 of capital loss can be deducted against earned or other types of income in a given year. 1 For example, say that Frank realized a capital gain of $10,000. He also realized a capital loss of $30,000. He will be apply $10,000 of his loss against his gain, but can only deduct an additional $3,000 of his loss against his other income for that year. Then, he can deduct the remaining $17,000 ($20,000 - $3,000) of his capital loss in $3,000 increments from income every year from then on until the entire amount has been deducted. However, if he realizes another capital gain in a future year before he has exhausted this amount, then he can deduct the total remaining loss against that gain. So, say he deducts $3,000 of that $17,000 loss in each of the next two years and then realizes a $20,000 capital gain. Frank can then deduct the remaining $11,000 of loss ($17,000 - $6,000) from that capital gain, leaving a taxable gain of only $9,000."
Use use up to the $3,000 of the loss to offset current year income. The remaining loss is carried forward and applied to future years income, $3,000/year, until the loss is used up.
@The Tax Geek My Employer gave me Company Stocks that vested immediately over the last 5 years every year.They held back Some shares to Pay for taxes they said, The Shares Value still show in Dollars on My PayStub every year as Earned income. They showed the entire amount on my income pay stub in dollars. So can you commnet what to do here: Since I Sold those RSU Vested stocks this Year and also had Some Stock Options I exercised this year s well. ... Now I hear in order to NOT pay double taxes on Capital Gain or loss in general has to know cost Basis? to tke into account taxes already paid? Please Expand on these RSU and Stock option sales.
What I believe you have is a "non statutory stock option." When such options are exercised, the difference between the option price as of the date of the grant and the market value of the stock is taxed to you on your W-2 as regular wage income. There should be a "v" in box 12 of your W-2. Since most NSSOs are sold the day they are exercised, there should be minimal capital gains. You will be a brokerage statement showing a gain of the sale proceeds and the original option price. You make an adjustment on form 8949 to reflect the actual gain/loss. I will definitely make a video on this subject in the near future.
@@TheTaxGeek Thnks...no "V" in Box 12a, 12b,12c,12d ...so what would that mean? they paid the tax? when they sold some shares before grant/vest same day over the last 5 years ?
If the land was actively being used for farming, it is essentially a business asset, and a loss upon selling it could be used to offset other income with no limit. If it's just farmland that is not in active use, then the loss is a non-deductible personal loss.
Why am I told to ADD a $3000 loss on line 7 of the 1040 sr form? It increases my taxable income. I do not see further on being able to deduct it on that form. Schedule D shows the loss only.
@@TheTaxGeek I know it means a negative and substracting...but the gist of my query was....reading and filling out the remainder of the form, i do not see where that $3000 is being subtracted to my benefit.
Would it be correct to assume the capital loss cap at 3k is a deduction on taxable income to reduce AGI and is not a dollar for dollar credit against taxes owed like the EV tax credit?
OK what if I have $20,000 in carry forward losses for 2023 tax year. Then in 2023 I make $20,000 in capital gains, would by tax bill be $0 since I carried forward $20,000 in losses? I have heard conflicting info just trying to understand as it is more than the $3,000 in losses.
If you have $20K in capital losses going into 2023 and you have $20K In capital gains in 2023, they would be entirely offset by those losses. The $3,000 loss limitation only applies to the excess of capital losses over capital gains.
@@TheTaxGeek this comment made me even more confused. not going to lie. what does "the 3000 loss limitation only applies" stuff even mean? I thought you can only deduct up to 3000 a year.
@@TheTaxGeek honestly, I think we conflictingly interpret their question. I think he's asking "if I've carried forward 20,000 in losses from previous years, and then now I made 20,000 in gains this year, can I apply all 20,000 losses carried forward to my 20,000 in gains now to pay 0 taxes." if that's what they're asking, no, right? only 3000 can offset their gain?
If you use the same online provider, software program, or professional preparer, any carry forward losses will carry forward to the current year. If you are using a new online provider, software, or preparer, you will need to look the carry forward information up on the prior year return.
If you only had capital losses (and no other income) you don't have to file a tax return: however, you might want to file one to establish a capital loss that can be used to offset future gains.
@www.youtube.com/@TheTaxGeek. What if you have $40,000 capital gains and a $10,000 capital loss. Can you take the entire $10,000 capital loss against the game and therefore have a total capital gains of only $30,000? That way you would’ve used your entire capital loss in the same year?
