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Capital loss carryover: Use it or lose it

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in Small Business Tax

Q. My father is 88 and in poor health. He has a $80,000 capital loss carryover from 2013. Can this be transferred to a relative? G.M., Seattle

A. No. The capital loss can offset capital gains realized this year, plus up to $3,000 of ordinary income, before any excess is carried over to next year. The carryover lasts indefinitely until it is exhausted or the taxpayer passes away, but it can’t be assumed by an heir or be gifted. Perhaps this might be an optimal time for your father to sell off appreciated capital assets to absorb some of the capital loss carryover.

Tip: Coordinate estate planning aspects to maximize the tax benefits. A tax pro may help.

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