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In 2018 we have had a Capital Gain Loss of over 500K in a…

Hello- In 2018 we...

Hello- In 2018 we have had a Capital Gain Loss of over 500K in a long term investment fund. We are planning on selling our primary residence that we have lived in over 20 years, and paid 500k but can sell it for 1.5M.

Accountant's Assistant: The Accountant will know how to help. Is there anything else important you think the Accountant should know?

Question is can we offset the 500K (extra profit ) with our loss of 500 K in the investment fund.

Accountant's Assistant: What else should I tell the Accountant?

Since they only allow a 500 K joint profit? (we are married)

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Answered in 6 minutes by:
3/24/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,136
Experience: Taxes, Immigration, Labor Relations
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In short - the answer is YES - when you have realized capital losses - these losses may be fully used to offset other capital gains.

To have realized loss - assets must be sold.

Section 121 exclusion may be used separately - if you own and used the property as your primary home - as a married couple the gain - up to $500k may be excluded from taxable income.

Let me know if you need any help with determination or reporting.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,136
Experience: Taxes, Immigration, Labor Relations
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Customer reply replied 3 months ago
Do we have to sell the house in the same year we incurred the capital loss? In other words, can I take $500K loss this year and sell the house next year and still offset the remaining capital loss against the house sale.
Next - If the loss happened this year. Can I apply it to the gain in 2017?
Phone call session started

Let consider following illustration example...

For instance you sell in 2018 some assets and realized $500k capital loss.

assuming you have some $10k capital gain in the same tax year.

So your losses will be fully used to offset these gains PLUS $3000 will be used to offset other taxable income.

The remaining capital loss - in this example $487k - will be disallowed - and carried to the following tax year.

In 2019 - these losses will be used to offset any gain realized in THAT tax year.

Let me know if that what you are looking?

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