@mharrissbn wrote:
I invested in a LLC with intent to turn it into a functioning business but it never developed. I know I can write off the losses but it seems that I have to have a capital gain to offset the losses vs regular income. I can sell stocks to offset the losses for capital gains but need to know if this will work prior to the actual selling of the stocks.
Yes, and that is a strategy that many use to cash in the profit on long term capital gains that have a low cost basis (as long as the loss is unrelated to the gain so that it is not a "wash" sale). They then use the proceeds of the sale to purchase the stock back so the cost basis become the new purchase. Thus keeping the same investment but with a new cost basis.
Otherwise if the loss is more than the gain, up to $3,000 of ordinary income will be offset leaving any addition loss to be carried to the next tax year. Losses must be claimed in the tax year that the loss occurred and tax years cannot be skipped or the carry-over will be forfeited.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
