Q: In 2002, I bought stock in a company that just recently merged with another company. I bought the shares at $15; now they're worth only $12 and change. Can I deduct a loss for 2005? L.A.R., San Diego
A: Yes, but you have to sell the shares to realize the loss. If the stock is worth, say, $12 when you sell it and you own 1,000 shares, your loss is $3,000 (1,000 shares times $3). That happens to be the annual amount of losses you can use to offset highly taxed ordinary income. So, if you have no other gains or losses this year, your $3,000 loss can provide the maximum tax benefit for 2005.
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/22692/sell-stock-to-capture-valuable-losses "