I know how to process capital gains and capital losses, and how to carryover excess losses if they exceed gains. I am looking for a way to CARRYFORWARD losses completely, without using any to offset this year's gains. I know that businesses do it all the time to potentially offset future tax liability from future gains. I can't find a proper way NOT to deduct capital losses on an individual return, so all of the losses are carried forward.
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why would you want to do that? what is the advantage?
The advantage would be writing the loss off in the future, if one expects to be in a higher tax bracket then.
I think you are thinking this backwards, you'd want to defer deductions if you believed you'd be in a HIGHER tax bracket in a future year.
Regardless, gains and losses have to be reported in the year they were incurred. The way to have managed this was to holding on to the losing asset until a future year when you were in a higher tax bracket and then sell.
p.s. capital gains tax brackets are not that progressive. It's normally 15% unless your ORDINARY income is VERY high or VERY low so being in a higher or lower bracket than 15% is not overly common (but it can occur)
I misspoke earlier - I meant to say "if one will be in a HIGHER bracket". If you run a small business, for example, you can choose not to deduct a loss in a year it occurred, and carry it FORWARD up to 7 years and decide when to do it. I was looking for a way to do it properly on an individual return, not on business one.
The reasons are quite simple: one could be on 10% bracket in a current year (was a student most of the year, had little income) but knows that he will be in 36% bracket next year, because he will have lots of income. It makes total sense NOT to deduct any losses now, and hold on to them until next year, if possible.
I understand your thought process. However you are required to report the TRANSACTION in the year it occurs. So if you want to sell the gain this year and sell the loss in a future year, then there is no issue with that. The IRS is not going to let you manage the tax you owe unless the asset remains at risk (in other words, if your strategy is to sell the loss in a future year, you are still at risk for losing even more). But you can't sell the security (whether for a gain or a loss) and then decide not to report it until a future year; if you have a NET capital gains loss, that can be carried forward but you can't manufacture the loss carry forward loss by reporting the gains and not reporting the losses. You CAN manufacture the loss carry forward, by SELLING the gains and NOT selling the losses.
Note, generally speaking, there are only 3 LONG TERM capital gains tax brackets (2018 SINGLE brackets listed)
0% - if your ORDINARY income plus CAPITAL GAINS is below $38,600.
15% if your ORDINARY income plus CAPITAL GAINS exceeds $38, 600 and is below $425, 800
20% if your ORDINARY income plus CAPITAL GAINS exceeds $425,000
see page D-4 of the Schedule D reporting instructions:
"Be sure to report all of your capital gains and losses even if you can't use all of your losses in 2018."
https://www.irs.gov/pub/irs-pdf/i1040sd.pdf
The short answer is no, there is not the same rule for individuals as there are for say corporations. If I remember correctly, a corporation cannot deduction a capital loss against its ordinary income, only against capital gains. For individuals, capital loss of up to $3000 is allowed against ordinary income, except if it creates and NOL, and other exceptions as specified.
The advantage would be writing the loss off in the future, if one expects to be in a lower tax bracket then.
That doesn't make sense to me. Deducting a loss when you are in a higher marginal bracket is more advantageous than taking a loss when you are in a lower marginal bracket.
I still hav a 50,000dollar Hurricane loss carryover. How is that entered to get the deduction.
M wife and I are both retired and only have our retirement income
Neither of us will live long enough to use up the total remaining deduction of 3,00 per year
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