Is It Time To Take Your Losses?

Towards the end of the year is when most people start to review their losses and gains. What went well, what didn’t for the year? The markets could get a little flighty with the budget debate over the next few weeks. Decide. Are you a buy and hold kind of person. Do you want to get out before the market goes nuts, as if it hasn’t already!!! Well if the stock/mutual fund you once purchased no longer appeals to you for any number of reason and you decide to sell there are a few things to keep in mind. Any losses you may incur will be able to be used to offset any gains you had in the market. In addition, if you had losses above those gains, you are allowed to take up to $3000 in losses against other income (using 8949/ Sch D) on the front page of the 1040 tax return. If you were unfortunate enough to have losses above $3000, you are allowed to carry those losses to future years to offset any gains in those years. The Sch D allows for the carry forward. Check with a tax preparer if you find this confusing.

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