turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

Capital gains taxes and in kind purchase offset

Is it possible to incur capital gains and then separately sell products at a loss with the result being a reduction in capital gains taxes?

x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

3 Replies
mirthaguer
Employee Tax Expert

Capital gains taxes and in kind purchase offset

Your question as I understand it is that you have capital gains and want to claim an expense for a product to lower your tax liability.   You have two separate transactions. Capital gains are reduced by capital losses.   If no capital losses you will show in  your income tax the capital gain.  The the other transaction you site is selling products to deduct against the gain.  I think this is mixing apples and oranges.  If you have a business and you sell a product that will be an expense, but you will also have the income from the sale of the product.   

Capital gains taxes and in kind purchase offset

What about if the product is sold at less than cost? Will my overall taxes be less because my total income will be less because the loss on product sales offsets the capital gains from sale of stock?

NateTheGrEAt
Employee Tax Expert

Capital gains taxes and in kind purchase offset

If your business operates at a loss, your business losses are netted against all other types of income. Losses from a business would be considered ordinary losses, not capital losses. Therefore, they are not specifically offset against your capital gains. So you would still have the capital gains income but would have ordinary losses that reduce your total income. 


In general, since long-term capital gains are taxed at a lower rate than ordinary income, an ordinary loss (such as a loss from business) is more tax beneficial than a capital loss. 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies