If my short term stock gain for the year is $10,000, accordingly loss of $15,000, and I have interest gain from saving account in the amount of $1000.
How the taxes are calulated in such case? consediring my overall net capital loss of 5,000 (15,000-10,000) for the year. How will the deduction of up to $3,000 of loss play a role against other kinds of income, including my salary and interest income ($1000).
If you have a capital loss, up to 3,000 will applies against other income in the current year.
For example:
Hopefully this helps illustrate the concept for you!
This article is a helpful overview of this topic as well: Capital Gains and Losses
Your $15,000 stock loss does offset your $10,000 stock gain, leaving you with a net capital loss of $5,000 for the year.
The IRS allows you to deduct up to $3,000 of capital losses per year against other types of income, like your salary or the $1,000 in interest from your savings account.
The leftover $2,000 of your loss (since your total loss is $5,000 and you’re using $3,000 this year), will carry over to future tax years. This means it can help offset gains or income next year.
The $3,000 deduction reduces your overall taxable income, which will ultimately lower your tax.
This deduction comes into play before any tax brackets are applied, so it’s a straightforward way to lower your taxes.
You will then carry the remaining $2,000 in losses forward to the next tax year to reduce taxes on future gains or income.
For Additional Information See:
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