stock losses

Forum|Forum|5 years ago
January 30, 2021
2 replies
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Planning on selling my rental home. Can I use a long term stock loss ( the whole loss, the full amount) to offset my capital gains?

Thanks,

S Lewis

Deduction

Critter-3

Level 15

First I hope you have been depreciating the property as required ... if you have not then RUN to a local tax pro to file this year's return and make the correction using the form 3115.

When the property is sold you must recapture the depreciation that was allowed or allowable which is then taxed as ordinary income at a rate no higher than 25% and the rest of the profit is capital gain which can be reduced by capital losses on the Sch D.

MaryK4

Level 15

No, unfortunately, if you have a capital loss carryover, you are only able to use $3,000 per year.

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SuzlewisAuthor

Level 2

I am Very sure I depreciated the property - I go through all the windows on Turbo Tax every year. Since I file separately from my husband, can I still deduct $3,000 a year or is it less? Also should I just sell that amount, or as close to that amount that I can, (what ever you tell me I can deduct) each year from my stock loss instead of selling it all this year? Don’t know if I made myself clear as to my replied questions.

Mike9241

Level 15

I am Very sure I depreciated the property - I go through all the windows on Turbo Tax every year. Since I file separately from my husband.

Depreciation has nothing to do with capital losses. rental activities are subject to the passive activity rules.

the amount that can be deducted as a loss can be limited. losses from passive activities generally flow to form 8582. the depreciation deduction is based on the basis of the asset and the appropriate depreciable life and method. for example. a personal residence that is rented is depreciated over 27.5 years. so if the cost (excluding land) was $27,500 depreciation would be a $1,000/year; $110,000 cost depreciation is $4,000 per year.

depreciation is added to other rental expenses and subtracted from rental income. if expenses exceed income you have a loss

can I still deduct $3,000 a year or is it less? as stated the $3,000 cap is for capital losses and for your filing status it's cut in half - $1,500. TT takes care of this if you indicate the proper filing status.

Also should I just sell that amount, or as close to that amount that I can, (what ever you tell me I can deduct) each year from my stock loss instead of selling it all this year? Don’t know if I made myself clear as to my replied questions.

it seems part of your thread is missing because I can't find what you are asking or trying to accomplish.