Question: Stocks and Taxes

[itsrobert]

What if I sell at a loss right now and buy the same stock back at about the same price or lower and hold on to it.

Can this lower my taxes this year?

thanks

[SE_Ohio_Dem]

1. Wash Sale

I think you have to wait 31 days or else it's considered a "wash sale"...ie it never happened and you can't take the lose. Warning: I'm not a tax accountant.

[itsrobert]

2. Sound reasonable

Looks like a loophole that's closed.

thanks

[SE_Ohio_Dem]

3. Capital loss Maximum and Carry Forward.

Also, I think you're limited to $3000 of losses over and above any gains. If you made $3000 somewhere and you have $8000 in loses, you can offset the $3k gain with $3k of the loss, take $3k of loss against regular income and then take the remaining $2k next year. I think you can "carry it forward" for something like 5 years but that might be state by state.

[A HERETIC I AM]

4. Capital losses do not expire.

You can carry them forward until they are used up, but you are correct about the $3,000 limit.

IRS Publication 550 discusses this.

http://www.irs.gov/publications/p550/ch04.html#d0e10931