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Do all realized gains increase AGI? What would happen to my AGI if I realize a $5k and offset it with a $5k loss?

 
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5 Replies

Do all realized gains increase AGI? What would happen to my AGI if I realize a $5k and offset it with a $5k loss?

NET gains raise AGI  so you can offset a gain with a loss. 

Anonymous
Not applicable

Do all realized gains increase AGI? What would happen to my AGI if I realize a $5k and offset it with a $5k loss?

net capital loss of x will offset a net capital gain of x

some types of ordinary loss of x may, may not, or more than  fully offset a capital gain of x

a passive loss of x may not be fully deductible while the gain would be 

an ordinary loss of x could more than fully offset  . equal gain (as far as taxes) because long term gains could be taxed at 0% while the schedule C could reduce self-employment taxes and ordinary income taxes

Do all realized gains increase AGI? What would happen to my AGI if I realize a $5k and offset it with a $5k loss?

My question is specifically about AGI.If I I sell one stock with a loss of -$4k and one stock with a gain of $1k, my net loss would be -$3k. However, how would this affect my AGI for the tax year? (I am not asking about my ordinary income or anything other than AGI specifically)

Do all realized gains increase AGI? What would happen to my AGI if I realize a $5k and offset it with a $5k loss?

If you subtract 3000 from your other income your GI  will go down ... and if you have no other adjustments then your AGI would be the same amount ... not sure how much clearer that can be. Please look at a form 1040 to see how that happens.

Do all realized gains increase AGI? What would happen to my AGI if I realize a $5k and offset it with a $5k loss?

If you have investment sale losses, after you subtract the losses from your gains you can only deduct up to 3,000 per year. You can only deduct up to 3,000 (1,500 MFS) loss per year after any gains you have.  So if you have a lot of current gains you can use up the loss.  The rest you will have to carryover until it is used up.

And yes, investment losses will reduce your AGI.  And Net gains will increase your AGI.
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