Can short term or long term losses be used to offset dividend income?

[paul-j-heckman]

pretty straightforward.  I am going to take some larger short term losses this year.  i also have dividend income, but it will be much smaller.  so say if i have 30K of short term losses, but 7K of dividend income, can i apply those short term losses to flatted out the dividend income?

[Bsch4477]

No. Dividends are not offset by capital gains or losses.  

[paul-j-heckman]

from what I'm reading up on, that might not be entirely correct:

"if you're left with a net capital loss for the year after offsetting all capital gains, you can use up to $3,000 of that loss to offset your regular taxable income, including income you receive from dividends. "

[Bsch4477]

Yes, any remaining capital loss after reconciled with capital gains is subtracted from income up to $3,000. It doesn’t matter whether that income is from wages, interest or dividends. My previous answer was to correct any impression that capital loss was subtracted from dividends especially. 

[paul-j-heckman]

fair.  i should have noted: all of my income is from investing.  gains (losses) or dividends

so in my case, if i use the previous example, and i have 30K of losses and 7K of dividends, I can only use 3K of the 30K to apply to dividends?  So if this represents all of my realized/income for the year, i still have to report that I'm +4K positive net income (7K div less 3K applied from losses)?

seems odd?

[Bsch4477]

You understand it perfectly. The unused capital loss is carried over to future years until it is used up. 

[Mike9241]

up to $3,000 in net capital losses are allowed so this can offset other income - nothing specific.