Capital Gain/Loss Offset

Forum|Forum|4 years ago
April 6, 2022
2 replies
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I have LT capital gain for 2021, and wanted to know when do my LT capital loss have to be realized by in order to be able to use it to offset against my 2021 LT gain?

Best answer by Anonymous_

@Shopper08 wrote:

I have LT capital gain for 2021, and wanted to know when do my LT capital loss have to be realized by in order to be able to use it to offset against my 2021 LT gain?

The losses have to be realized during the 2021 tax year.

Also, you can carryover losses from prior tax years to the 2021 tax year.

Anonymous_Answer

Level 15

@Shopper08 wrote:

I have LT capital gain for 2021, and wanted to know when do my LT capital loss have to be realized by in order to be able to use it to offset against my 2021 LT gain?

The losses have to be realized during the 2021 tax year.

Also, you can carryover losses from prior tax years to the 2021 tax year.

Shopper08Author

Level 2

Specifically, I bought 50 units of Stock ABC on 3/1/2021 and bought another 30 units on 11/1/2021, all are currently at an unrealized loss. So I will not be able to use these losses against my LT gains when I file my 2021 taxes, even if I realized losses for these 50 initial units on 3/2/2022 (which is prior to my 2021 filing)? In other word, losses will have to be used either on the tax year they were realized or carry forward years?

Is there a duration for how long the losses can be carryover for? And do the losses accumulate, each year in the years where I have losses exceeding the allowable offset amount per year?

Anonymous_

Level 15

@Shopper08 wrote:

....losses will have to be used either on the tax year they were realized or carry forward years?

Yes, the losses will be realized (to offset gains) in the year they were incurred, in this case 2022.

Losses can be carried forward indefinitely (at least until you die). Losses offset gains and then up to $3,000 can be used against all other income, with the balance (if any) being carried forward.

RobertB4444

Level 15

Your loss and gain have to occur in the same year in order to offset each other. However, if you have a loss with no gain the portion greater than $3,000 is carried forward into the next year in order to offset future capital gains.

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