View Full Version : US capital gains/losses question

bob winter
04-17-2010, 06:35 AM
Actually, I know about the US tax treatment of capital gains. I am wondering about what happens to capital losses. In Canada, capital losses can be carried back three years, against previous capital gains, and whatever can't be carried back can be carried forward indefinitely and applied against future capital gains. The Canadian tax return provides a schedule in order to keep track of the capital gains/loss situation and the Notice of Assessment states what amount of capital losses are available for carry-forward. I would assume that US taxes must provide for a carry forward as well but I am wondering if I am correct in this assumption and, if I am, what the form number involved is. I could likely find this out on the IRS website but it would likely be a pain in the ass. Any information will be greatly appreciated.

Paul Pless
04-17-2010, 06:40 AM
schedule d - for personal income taxes

there are other methods of handling gains and losses reporting if you own a llp or llc or a sub- chapter s corp

bob winter
04-17-2010, 06:56 AM
Thanks, Paul. I already know about Schedule D, which is where the capital gains/ losses are itemised. If there is a gain, the treatment is obvious but I am wondering about the losses. This is a personal return, no S corps, etc. Things have not been all that good, capital gains wise, the last couple of years and the losses are mounting. Just want to make sure I don't mess up. I only do the one US return a year and that is because I have to do it to calculate the foreign tax credit on the Canadian return. Fair amount of dollars involved but the the actual return is simple because it is all interest, dividend and capital gains.

C. Ross
04-17-2010, 07:34 AM
Publication 550 gives the rules. (http://www.irs.gov/publications/p550/index.html)

I think the simple limit is $3000 - any losses more than that have to be carried to future years.

04-17-2010, 08:39 AM
Good thing, too. It has helped to soften some of the sting that the meltdown had.

Still has, actually.

bob winter
04-17-2010, 10:41 AM
OK, I have read the publication and am on top of it. The US tax software I use isn't clear on what happens but I printed out parts of this year's return and see the loss from last year carried over. Too bad you guys can't carry back like we can in Canada, doesn't seem entirely fair.

C. Ross
04-17-2010, 07:12 PM
Too bad you guys can't carry back like we can in Canada, doesn't seem entirely fair.

Yes, that would be a smart idea. Here, we have to periodically deal with dopey proposals to tax it as regular income in the period in which the appreciation occurred. Nuts.