ownyourfuture
Thinks s/he gets paid by the post
- Joined
- Jun 18, 2013
- Messages
- 1,561
I'm in the process of signing up for health care insurance under the ACA for the first time. (My cobra runs out on December 7th)
My pension income totals $36,696.00 per year.
As of today my total ’taxable’ income at Fidelity is $10,681.10
Of that total $10,578.50 are ordinary dividends, $59.76 capital gains distributions, $6.98 in interest & $35.86 in tax exempt income.
Of the $10,578.50 in dividends, $7,626.70 are 'qualified'
Toal income = $47,377.10
According to the agent helping me to get this set up, this puts me dangerously close to the income threshold relating to subsidies.
In that same account I have capital losses of $5,485.92
$3,950.97 short-term & $1534.95 long-term.
Can I deduct $3000.00 of those capital losses from my dividend income, or is that only applicable towards short & long term losses on stocks’, etf’s , funds etc ?
I researched before posting & found a related article at the Motley Fool
Can Capital Gains Offset Dividends? -- The Motley Fool
The full title of the article is:
Can Capital Gains Offset Dividends?
Capital gains and dividends are both ways of making money from an investment so, for tax purposes, they can't offset each other.
According to that, the answer to my question would be no.
However, later in the article I saw this:
Offsetting capital gains with capital losses
Capital gains and dividends can't offset one another because they're both a way of making money on an investment. However, capital losses can be used to offset gains. When you buy a stock and then sell it for a price that's lower than what you paid, it's considered a capital loss.
Any time you lose money on an investment, that loss can be used to offset money you make on an investment. Capital losses are initially used to offset gains of the same nature, which means short-term losses are first used to offset short-term gains, and long-term losses are first used to offset long-term gains. However, either type of net loss can then be used to offset the other type of gain.
Let's say you have $2,000 in short-term capital losses, $1,000 in short-term capital gains, and $1,500 in long-term capital gains. You'd first use that short-term loss to essentially eliminate that short-term gain for tax purposes. Then, you'd take the remaining $1,000 in losses and use it to cancel out $1,000 in long-term capital gains, leaving you with just $500 in long-term gains to pay taxes on. Furthermore, if you're left with a net capital loss for the year after offsetting all capital gains, you can use up to $3,000 of that loss to offset your regular taxable income, including income you receive from dividends.
If I understand that last sentence, since I'm left with a net capital loss for the year after offsetting all capital gains, I should be able to use up to $3000.00 of that loss to offset my dividend income ?
I'm hoping someone here at ERF has dealt with this situation before, & if so, be nice enough to let me know if I'm right/wrong.
Thanks in advance
My pension income totals $36,696.00 per year.
As of today my total ’taxable’ income at Fidelity is $10,681.10
Of that total $10,578.50 are ordinary dividends, $59.76 capital gains distributions, $6.98 in interest & $35.86 in tax exempt income.
Of the $10,578.50 in dividends, $7,626.70 are 'qualified'
Toal income = $47,377.10
According to the agent helping me to get this set up, this puts me dangerously close to the income threshold relating to subsidies.
In that same account I have capital losses of $5,485.92
$3,950.97 short-term & $1534.95 long-term.
Can I deduct $3000.00 of those capital losses from my dividend income, or is that only applicable towards short & long term losses on stocks’, etf’s , funds etc ?
I researched before posting & found a related article at the Motley Fool
Can Capital Gains Offset Dividends? -- The Motley Fool
The full title of the article is:
Can Capital Gains Offset Dividends?
Capital gains and dividends are both ways of making money from an investment so, for tax purposes, they can't offset each other.
According to that, the answer to my question would be no.
However, later in the article I saw this:
Offsetting capital gains with capital losses
Capital gains and dividends can't offset one another because they're both a way of making money on an investment. However, capital losses can be used to offset gains. When you buy a stock and then sell it for a price that's lower than what you paid, it's considered a capital loss.
Any time you lose money on an investment, that loss can be used to offset money you make on an investment. Capital losses are initially used to offset gains of the same nature, which means short-term losses are first used to offset short-term gains, and long-term losses are first used to offset long-term gains. However, either type of net loss can then be used to offset the other type of gain.
Let's say you have $2,000 in short-term capital losses, $1,000 in short-term capital gains, and $1,500 in long-term capital gains. You'd first use that short-term loss to essentially eliminate that short-term gain for tax purposes. Then, you'd take the remaining $1,000 in losses and use it to cancel out $1,000 in long-term capital gains, leaving you with just $500 in long-term gains to pay taxes on. Furthermore, if you're left with a net capital loss for the year after offsetting all capital gains, you can use up to $3,000 of that loss to offset your regular taxable income, including income you receive from dividends.
If I understand that last sentence, since I'm left with a net capital loss for the year after offsetting all capital gains, I should be able to use up to $3000.00 of that loss to offset my dividend income ?
I'm hoping someone here at ERF has dealt with this situation before, & if so, be nice enough to let me know if I'm right/wrong.
Thanks in advance