I have a question on capital gains and losses.
Lets consider a scenario wherein I incurred short term capital losses of $20,000 earlier in 2013. Now I currently hold stocks which if I sell before end of this year will net to short term capital gains of $10,000. If I was to sell the stocks in 2014 instead of 2013, will the capital losses carry forward help me offset the gains so that I dont need to pay taxes on the gains of $10,000 in 2014 ?
Or am I only allowed to carry forward $3000 per year of capital losses ? If I can only carry forward losses of $3000 to next year then I would rather sell the stocks before end of this year so that capital losses from earlier this year would offset the gains and I wont need to pay taxes on them. Please advise.
