so if I lose $100,000 in 1998 and then make $10,000 in 1999 I only get to take off $3,000 and be left paying taxes on $7,000 in 1999?
Jim,
The way I understand it is:
1. You can lose all you want but can only deduct a maximum loss of 3,000/yr & carryover the balance.
In 1998, you lost 100,000, deducted 3,000, leaving a balance of 97,000.
2. When you start making money, you can apply your carried-forward balance up-to what you made resulting NO Taxes.
In 1999, you make 10,000, you offset the 10,000 from the balance forward, NO TAXES, & have a new balance of 87,000 of loss carryover.
I thought the 3,000 was a deduction limit... BUT not an Income limit also.
ALSO, all the money we're talking about is from the same type of source; ie, Capital Gains & Losses.
(excluding your salary or other income)
I sure hope I'm right...
I would like to see clarified by an expert.
Thank you,
Joe |
