topic Will my investment loss this year carryover into a future trading LLC I plan on creating next year? in Investors & landlords

Will my investment loss this year carryover into a future trading LLC I plan on creating next year?

Keep1up — Sat, 19 Dec 2020 23:58:19 GMT

I currently have more capital losses than gains so I'll be getting 3k of it back next year. As funny as it sounds, next year, I plan on starting a trading LLC with the goal of achieving the "trader tax status" and the 475 election. Am I going to be able to roll the remainder of this loss onto next year's (new llc's) income? Or do I have to hurry and try to create the LLC in the next 10 days.. 😂

Re: Will my investment loss this year carryover into a future trading LLC I plan on creating next year?

M-MTax — Sun, 20 Dec 2020 04:37:36 GMT

The capital loss carries over to next year.

Re: Will my investment loss this year carryover into a future trading LLC I plan on creating next year?

Keep1up — Sun, 20 Dec 2020 15:37:37 GMT

I'm aware that the capital losses roll over, but I guess what I'm asking is will my previous "capital" losses convert to "ordinary" losses after the LLC is formed, or will they remain separate?

Re: Will my investment loss this year carryover into a future trading LLC I plan on creating next year?

M-MTax — Sun, 20 Dec 2020 19:48:11 GMT

Those losses won't convert to ordinary losses.

Re: Will my investment loss this year carryover into a future trading LLC I plan on creating next year?

acqua18 — Tue, 16 Mar 2021 04:01:46 GMT

HI - I think this is way it will work. Need to do more research or consult CPA. Your keep your losses in under your SSN. Carry forward. Let us say it is 10,000/- Your form LLC and next year you make a gain of 5 K. That 5 K will be a pass through to your 1040 as 5 K gain if it is LLC partner or solo. Then next year you get to write off 5 K gain against carry forward losses of 0 10 K.

Re: Will my investment loss this year carryover into a future trading LLC I plan on creating next year?

acqua18 — Tue, 16 Mar 2021 04:04:52 GMT

Just wanted to warn you, I am planning to wind down my LLC because it is so painful to file taxes under llc if you have an investment business. Turbo tax business works only on windows, does not import transactions from your financial services like turbo tax deluxe or premium. So you have to manually enter and it is painful to enter accurate information and you have to maintain books for LLC