Sell stock to capture valuable losses — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
  • LinkedIn
  • YouTube
  • Twitter
  • Facebook
  • Google+

Sell stock to capture valuable losses

Get PDF file

by on
in Small Business Tax

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.

Related Articles...

Leave a Comment

Previous post:

Next post: