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Old 07-10-2020, 07:33 PM   #21
Thinks s/he gets paid by the post
Join Date: Jan 2006
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Originally Posted by Souschef View Post
The $3000 limit applies after you deduct the loss from all your gains.
For example,
If your gains were $20,000 and your loss was $15,000 you can deduct all of it
However, if your gains were $15,000 and your loss was $20,000 you could only deduct $3000 that year. The remaining $2000 would be a capital loss carry forward you could deduct the following year.
I find the wording above a bit confusing:

I would prefer Sch D type wording:
1)if your gains are 20K and your loss is 15K your net result is a gain of 5K.
You do not deduct the 15K loss but have made full use of it.
2)if your gains are 15K and your loss was 20K, your net result is a loss of 5K.
Again you do not deduct the 15K loss that was netted against the 15K gain but have made full use of it. The additional 5K of loss that was not used against gains is subject to the 3K/yr limit so that amount (3K) is deducted from income this yr and the remaining 2K loss is carried over to next yr.
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Old 07-10-2020, 08:41 PM   #22
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As a footnote to this, in Michigan if the tax assessed value has gone down from amount at original purchase you can avoid the transfer tax. Can't speak to other states, but a weird little loophole in Michigan.
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