Have a Tax Question? Ask a Tax Expert
The long term capital losses will offset any long term capital gains.
The short term capital losses will offset any short term capital gains.
If you have net short term capital loss and net long term capital gain - your losses will offset long term capital gain.
If you have net capital losses - up to $3000 may be used to offset other taxable income, but the rest will be carried over to next year.
Please let me know if you need help in reporting.
There are many different types of income - wages, pension, social; security benefits, interest, dividends, capital gains, self-employment income, rental income, etc.
The capital gain is a profit that results from a capital asset, such as stocks, bonds or real estate.
You have a capital gain if you sell the asset for more than your basis. You have a capital loss if you sell the asset for less than your basis.
Capital gains and losses are classified as long-term or short-term. If you hold the asset for more than one year before you dispose of it, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term.
Capital gains and deductible capital losses are reported on Form 1040, Schedule D
Now - we are talking about how each type of income is taxed. You would have regular tax rate that would apply to most types of income. But long term capital gains are taxed differently.
If you have a net capital gain, that gain may be taxed at a lower tax rate than the ordinary income tax rates. The term "net capital gain" means the amount by which your net long-term capital gain for the year is more than your net short-term capital loss. Currently net capital gain is generally taxed at rates no higher than 15%, although, for 2008 through 2010, some or all net capital gain may be taxed at 0%, if it would otherwise be taxed at lower rates. There are some exceptions however...
There are also different rules apply to losses based on the loss type.
For instance - losses from the sale of personal-use property, such as your home or car, are not deductible. Losses from long and short term capital gains are treated differently (see above). Losses from wash sale (if you sell stock with loss and immediately purchase the same stock) may not be deducted, etc
So far these are different issues - type of income and tax rate that should be applied.
Let me know if you need any help.
can I deduct short term stock losses from what "I" see as regular income, like "wages", "interest", "rents", "self-employment income", ------(all happening in the same tax year).
short term stock losses - are classified as short term capital loss - yes - you may offset you other income (not capital gains) - like "wages", "interest", "rents", "self-employment income" - but your deduction is limited by $3000 in the current year.
And can I deduct long term stock losses, (stock held more than a year), against long term real estate (sales-gains),- also held over a year, - happening in the same tax year.
long term stock losses - is long term capital loss;
long term real estate (sales-gains), - if that is a gain resulted from the sale of the real estate property AND you are not in the business of selling real estate properties - it is long term capital gain.
The full amount of the long term capital loss may be used to offset the long term capital gain.
Sorry - that doesn't look as simple yes-no answer and contain several IF's - but that is the tax laws we have to relay,
Let me know if you need any clarifications or help with reporting.