Taxable brokerage account 1099 has loss

[davej]

Good morning !   

Our Taxable brokerage account 1099 has loss of 5,000 in some mutual funds and a 4,000 gain in interest.

This is a 1,000 loss right that can be carried forward without any tax this year correct?

[leeloo]

No. Interest is a totally different category than stocks or mutual funds.  A consolidated form may incldue a 1099-B. 1099-DIV and a 1099-INT, but each category is treated differently.

A mutual fund is a regulated investment company that pools funds of investors allowing them to take advantage of a diversity of investments and professional asset management.

You own shares in the mutual fund but the fund owns capital assets, such as shares of stock, corporate bonds, government obligations, etc. One of the ways the fund makes money for you is to sell these assets at a gain.

If the mutual fund held the capital asset for more than one year, the nature of the income is capital gain, and the mutual fund passes it on to you as a capital gain distribution. Form 1099-DIV, Dividends and Distributions, distinguishes this from other types of income, such as ordinary dividends.

Consider capital gain distributions as long-term capital gains no matter how long you've owned shares in the mutual fund.

https://www.irs.gov/faqs/capital-gains-losses-and-sale-of-home/mutual-funds-costs-distributions-etc/...

[TeresaM]

Capital losses are calculated with the type of investment (long or short) and would not be counted directly against gains on a Form 1099-INT. 
However, you can take them against other like-capital gains and then up to $3000 against income each year, carrying forward until they are used. ($1,500 if you're Married Filing Separately)

[Mike9241]

nope! at most $3000 in capital losses can be used in any one year to offset other income. the unused capital loss gets carried forward.  

[davej]

Thank-you both for the info on this !  I suppose Turbo Tax will show me where I can enter the loss and then the 3,000 would come off the interest income.

[VolvoGirl]

Just enter the 1099B sales.  

Enter a 1099 B under

Federal Taxes on left or Personal (Home & Business)

Wages & Income

Then scroll down to Investments and Savings

Then Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B) - click Start

Then click Add Investments at the bottom

Next screen hit Continue

Then don't enter or pick a bank, at bottom click on Enter a Different Way

Then pick box Stocks, Bonds, Mutual Funds - then Continue

Enter the bank or broker

Answer some general questions and Continue

Then Continue a couple more screens and you finally get to the 1099B entry screen.

You can enter a 1099B manually or try to import it.  If you import it be sure to check it over close and make sure the cost basis got imported and is right.  How to import your 1099

https://ttlc.intuit.com/community/entering-importing/help/how-do-i-import-my-1099/00/26254

If you have a net loss for the year you can only deduct 3,000 (1,500 MFS) max on your tax return.  The rest you have to carryover to next year.  You have to report the carryover every year until it's used up.  You can't skip a year.  

[davej]

Thank-you all ! I got it entered into TT and it went well.  I manually entered each sale as the import did not work for me and I did not want the summary route and having to send the IRS paper correspondence.

Learned something new and probably never have to report a loss in a taxable account again.

Take Care!

Dave