Hi
I'm new to stocks, so please bear with me.
Earlier this year i played around with day trading stock options. I failed miserably - $17.5k loss for the year.
I understand that a person can only take up to $3000/year in capital gains loss, and then roll over the balance to the following year, etc. That means it'll take me 6 years of $3000/year deductions.
At the same time, I started a job last year with a public company, and had stocks vest this year. I've also purchased stocks through the employee stock purchase plan (ESPP). Those stocks over the course of the year have grown by around $13,000.
If I understand correctly, if I were to sell the stocks that have vested, and that i've purchased through ESPP, the $13,000 would be short term capital gains, and would offset the -$17,500 short term capital gain losses for my stock options.
On the other hand, if I were to hold the stocks I own, then I wouldn't pay taxes on them until at some point in the future I sell, and at that point i would pay long term capital gain taxes, which are much more.
Thinking of just 'cashing out' (selling my stocks) so i can get that $13,000 capital gain tax (to offset the $17,500 capital loss), meaning i'd only have a $5500 capital loss for the year. Right away, same day, I'll take that money from selling the stocks, and purchase the stocks right away again. So i'd pay the tax, but would still own the same amount of stock, right?
Example:
If I own 90x Home Depot stocks. Total of $36,864 at current ticker price, but a 'capital gain' of $13,000 for the year.
I can sell all 90 stocks, meaning i'd get $36,864, and a capital gain of $13,000
Right away I buy 90x Home Depot stocks, so i end the year with a $13,000 short term capital gain tax for the year, and I still own 90 stocks.
Does this make sense? Am I missing anything here?
