topic I keep seeing the 3k limit on capital gains but what if you have a much larger loss against a large gain? in Deductions & credits

I keep seeing the 3k limit on capital gains but what if you have a much larger loss against a large gain?

JaimeCLT — Mon, 30 Dec 2024 16:24:17 GMT

Say I have a total capital gain on sale of stock of $50k, but I have a loss of another stock of $10k (assume all long term). Is the $10k completely offsetting the gain for a total of $40k total taxable gain (50 minus 10) the same year or will I still hit the $3k limit and trigger the need for a carry-over?

Re: I keep seeing the 3k limit on capital gains but what if you have a much larger loss against a large gain?

Mike9241 — Mon, 30 Dec 2024 17:01:39 GMT

misread your thread. @M-MTax is correct. net $40 capital gain

Re: I keep seeing the 3k limit on capital gains but what if you have a much larger loss against a large gain?

M-MTax — Mon, 30 Dec 2024 16:43:22 GMT

$40K would be your net capital loss. However, only $3,000 may be used to offset other income in any year.

@JaimeCLT has a capital gain of $50k and a capital loss of $10k, @Mike9241

The capital loss offsets $10k of the cap gain so the net capital gain is $40k. The $3k limit against all other income doesn't come into play.

Re: I keep seeing the 3k limit on capital gains but what if you have a much larger loss against a large gain?

VolvoGirl — Mon, 30 Dec 2024 17:14:23 GMT

If you have investment sale losses, after you subtract the losses from your gains then if you have a net loss, you can only deduct up to 3,000 per year. The rest you have to carryover. And you can’t skip a year.