Wondering What to Do With Your Capital Losses – Try These Ideas

Wondering what to do with your capital losses; why not try these ideas?  It was just days before Christmas and all through the land investors were scrambling to get the upper hand. Cries of “buy here” and “sell there” were heard throughout Wall Street, while every stockholder was busy trying to stay on his/her feet. Taxes and more taxes, they are such a pain, and we just don’t know what to do with our Capital gains.

Tis the Season for Deciding

This time of year is always important when it comes to capital gains, and losses. Many investors have both gains and losses at the end of a given year and likewise, many investors aren’t too sure what to do about those gains and losses. If you have a lot coming to you in capital gains and you don’t have a lot of losses to offset those gains, then you are probably going to just have to take your medicine so-to-speak and pay your taxes on the gains.

However, if you have losses from poor performing stocks or if you still have carry-forward losses from 2008-2009, then you can help offset those gains by selling off your less-successful stocks or applying those carry-forward losses to this year’s return.

To Use Your Losses Now Or Later, That Is the Question

However there are some other factors to consider when it comes to taking your capital losses or not. So the question is what should I do with my capital losses this year? In order to answer this question there are several other questions to consider.

• Should you recognize all of your unrealized capital losses before the year is over? – It’s a good idea to recognize your losses to the same degree as your gains, plus $3,000.
• Is it a good idea to save up capital losses and use them to offset capital gains down the road? – Typically, it is not a great idea to stockpile your capital losses, because it does not offer much in the way of benefits. However, there are some situations where using this strategy could be effective. If you think there’s a good chance you will recognize a large capital gain in 2015, plus, your current securities losses will be gone in 2015 because of price increases, and you use the money from selling securities losses to again buy securities that do not reap a gain in 2015, then stockpiling losses could be an effective strategy.
• What other circumstances would be bad for recognizing capital losses in order to offset long-term capital gains? – Taxpayers who fall into the 15 percent tax bracket and pay no income tax on long-term capital gains that have been recognized are usually better off waiting to recognize losses until after 2014, because the nontaxable income would be offset by the capital losses.

Contact GROCO for More Help

Of course, these scenarios are just some of the many possibilities when it comes to recognizing your capital losses and gains. Every taxpayer is different and each person’s investment portfolio is unique. If you have other questions and concerns regarding your capital losses and gains, then you should contact the professionals at GROCO for help. Just contact us or call us today at 1-877-CPA-2006.

We hope you found this article about “Wondering What to Do With Your Capital Losses – Try These Ideas” helpful.  If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page  or our website at www.GROCO.com.  Unfortunately, we no longer give advice to other tax professionals gratis.

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Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan L. Olsen, CPA, Wikipedia Bio

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The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business. Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most. They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

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In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges. Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.