net capital loss for the year

[AZ38]

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).

[Bsch4477]

The $3,000 is deducted from your total income. 

[Andrew_W]

If you have a capital loss, up to 3,000 will applies against other income in the current year.

For example:

• 100,000 in wage income (W-2)
• 500 in interest income
• 10,000 in capital losses
  
  3,000 of the capital losses will be subtracted from other income. 
  100,000 wages + 500 interest income - 3,000 capital loss = 97,500 adjusted gross income.
  
  The remaining 7,000 capital loss will carryforward to the next tax year.

Hopefully this helps illustrate the concept for you!
This article is a helpful overview of this topic as well: Capital Gains and Losses 

[Terri Lynn]

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.

• For example:  If you have a salary of $35,000, plus $1,000 of interest income from your savings account, plus a -$3,000 in losses, your taxable income would be  $33,000, so tax would be calculated on $33,000 as opposed to $36,000.

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:

• Topic no. 409, Capital gains and losses 
• Publication 544 (2024), Sales and Other Dispositions of Assets 
• Tax Time Gains and Losses: Calculating Your Investment Portfolio Results 

Please feel free to reach backout with any additional questions or concerns you might have!

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