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geedubya55
geedubya55, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 358
Experience:  17 years experience in business and individual taxation specializing in small business and farming
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I borrowed money against my stocks in 2010; in 2011, the value

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I borrowed money against my stocks in 2010; in 2011, the value of the stocks fell so low that the broker sold some of the stocks to maintain the margin of debt/value of stocks ratio. I didn't receive any cash in the transaction... will the entire amount of the sale of the stocks count as taxable income in 2011?

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The answer to your question is no. The entire sales price of the stocks sold is not taxable income because you will be able to deduct the amount that you originally paid for the stocks (your basis). Your broker should be able to provide you with the information concerning the sales price and the basis. If the value of the stocks fell below the original purchase price, you will have a net capital loss. This may be used to reduce other capital gains, and to a limited extent, can offset ordinary income.

Customer: replied 4 years ago.
Thank you! I will see if I can find that out. I purchased the stocks over a period of time when I worked for the company many years ago....hopefully I will be able to find out how much I paid for them. can you tell me what schedules I would need to file... and if I sign up for the monthly subscription, is there a way that I can have you answer the rest of my questions? You seem very helpful!
To report your stock sales, you use form 8949 to list each transaction separately, then the totals from 8949 flow to schedule D. From schedule D the net capital gain or loss flows to line 13 of the 1040. To request me for future tax questions, just start the question with "For geedubya55". If I am on line at the time, I would be glad to answer. Thanks again for your question.
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Customer: replied 4 years ago.
Thanks! One more question: my daughter is a full-time college student who turned 24 on April 30, 2011. She resided with my husband and me throughout 2011, and although she made just over $10,000 from her part-time job, we paid well over half of her expenses (including school expenses).
We'd like to claim her as a dependent, and I've read the IRS guidelines for claiming a family member as a dependent, but still am not clear: can I claim her if she turned 24 in 2011, or did she have to be 23 throughout the year?

Unfortunately you will not be able to claim your daughter as a dependent. She will not be considered a "qualifying child" because she had turned 24 as of the end of the year. She will not be considered a "qualifying relative" because her gross income was more than $3,700. Even though you meet all other tests to claim her as a dependent, those two circumstances disqualify her to be claimed as a dependent.

 

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