Sarasota County Bar Association
Manatee Chamber of Comerce

Writing Off Stock Losses

Losing money in an investment is never the goal. You can let yourself feel better at tax time by writing off capital losses. A capital loss occurs when you lose money selling a stock.

There are rules regarding the capital loss write off. It makes sense to do your homework before filing your return. Better yet, consult with an attorney who can advise you of your tax obligations.

You can write off all capital losses against the comparable capital gains. Over and above that, you can only write off $3000 against other income types.

If you only hold an investment for less than a year, it’s a short term investment. Any profit on the sale would be a short term capital gain. Conversely, any loss would be a short term capital loss. Investments held for longer than a year are long term investments. Gains and losses will be long term as well.

You may only write off long term losses against long term gains. Short term losses go against short term gains. Well, are you confused yet? If you have an investment portfolio that consists of long and short term investments, don’t fret. We can help you understand the maze in investment write offs. Give us a call for a consultation.

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